Rank and File Employee

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Rank and File Employee – refers to an employee holding neither managerial nor supervisory position as defined under existing provisions of the Labor Code of the Philippines, as amended.

Statutory Minimum Wage Earner

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Statutory Minimum Wage Earner – refers to a worker in the private sector who is paid with a statutory minimum wage, or to an employee in the public sector with compensation income of not more than the statutory minimum wage in the non-agricultural sector where the worker/employee is assigned.

Fringe Benefits

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Fringe Benefits – means any good, service or other benefits furnished or granted in cash or in kind, apart from the basic compensation, by an employer to an individual employee (except rank and file employee as defined herein) such as, but not limited to the following:

1. Housing;

2. Expense account;

3. Vehicle of any kind;

4. Household personnel, such as maid, driver and others;

5. Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted;

6. Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;

7. Expenses for foreign travel;

8. Holiday and vacation expenses;

9. Education assistance to the employee or his dependents; and

10. Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.

Non-resident alien not engaged in trade and business (NRANETB)

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Non-resident alien not engaged in trade and business (NRANETB) –refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of one hundred eighty (180) days or less during any calendar year.

Non-resident alien engaged in trade and business (NRAETB)

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Non-resident alien engaged in trade and business (NRAETB) – refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of more than one hundred eighty (180) days during any calendar year.

VAT Threshold

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VAT Threshold – refers to the ceiling set to determine VAT registrable taxpayers, currently set at three million (P3,000,000.00) pesos. It is the same threshold to be used to determine the income tax liability of self – employed and/or professionals under Sections 24(A)(2)(b) and 24(A)(2)(c)(2) of the Tax Code, as amended.

Taxable Income

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Taxable Income – refers to the pertinent items of gross income specified in the Code, less deductions, if any, authorized for such types of income by the Code or other special laws.

Professional

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Professional – Person formally certified by a professional body belonging to a specific profession by virtue of having completed a required course of studies and/or practice, whose competence can usually be measured against an established set of standards. It also refers to a person who engages in some art or sport for money, as a means of livelihood, rather than as a hobby. It includes but is not limited to professional entertainers, professional athletes, directors, producers, insurance agents, insurance adjusters, management and technical consultants, bookkeeping agents, and other recipients of professional, promotional and talent fees.

Self-employed

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Self-employed – a sole proprietor or an independent contractor who reports income earned from self-employment. He/She controls who he/she works for, how the work is done and when it is done. It includes professionals whose income is derived purely from the practice of profession and not under an employer – employee relationship.

Gross Income

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Gross Income – means all income derived from whatever source, including but not limited to the following items:

1. Compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions, and similar items;

2. Gross income derived from the conduct of trade or business or the exercise of a profession;

3. Gains derived from dealings in property;

4. Interests;

5. Rents;

6. Royalties;

7. Dividends;

8. Annuities;

9. Prizes and Winnings;

10. Pensions; and

11. Partner’s distributive share from the net income of the general professional partnership.

Gross Sales

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Gross Sales – refers to the total of all sale transactions reported in a period, without any deduction. However, for purposes of these regulations, the following shall be allowed as deductions:

1. Sales returns and allowances for which a proper credit or refund was made during the month or quarter to the buyer for sales previously recorded as taxable sales.

2. Discounts determined and granted at the time of sale, which are expressly indicated in the invoice, the amount thereof forming part of the gross sales duly recorded in the books of accounts. Sales discount indicated in the invoice at the time of sale, the grant of which is not dependent upon the happening of a future event, may be excluded from the gross sales within the same month/quarter it was given.

Gross Receipts

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Gross Receipts – refers to the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services, and deposits and advance payments actually or constructively received during the taxable period for the services performed or to be performed for another person. In the case of VAT taxpayer, this shall exclude the VAT component.

Employer and Employee Relationship

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Employer and Employee Relationship – exists when the person for whom services were performed (employer) has the right to control and direct the individual who performs the services (employee), not only as to the result to be accomplished by the work but also as to the details and means by which the result is accomplished. An employee is subject to the will and control of the employer not only as to what shall be done, but how it shall be done. In this connection, it is not necessary that the employer actually directs or controls the manner in which the services are performed. It is sufficient that he has the right to do so.

Employer and Employee Relationship

#TRAINlawDefinitionOfTerms

Employer and Employee Relationship – exists when the person for whom services were performed (employer) has the right to control and direct the individual who performs the services (employee), not only as to the result to be accomplished by the work but also as to the details and means by which the result is accomplished. An employee is subject to the will and control of the employer not only as to what shall be done, but how it shall be done. In this connection, it is not necessary that the employer actually directs or controls the manner in which the services are performed. It is sufficient that he has the right to do so.

Employer

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Employer – any person for whom an individual performs or performed any service, of whatever nature, under an employer-employee relationship. It is not necessary that the services be continuing at the time the wages are paid in order that the status of employer may exist. Thus for purposes of withholding, a person for whom an individual has performed past services and from whom he is still receiving compensation is an "employer".

Employee

#TRAINlawDefinitionOfTerms

Employee – an individual performing services under an employer-employee relationship. The term covers all employees, including officers and employees, whether elected or appointed, of the Government of the Philippines, or any political subdivision thereof or any agency or instrumentality.

Compensation Income Earners

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Compensation Income Earners – individuals whose source of income is purely derived from an employer-employee relationship.

BIR COR Reminders

Hi Taxpayers and Business Owners,

When you received your BIR 2303 Certificate Of Registration (COR), always look at the "Reminders" portion. See your Tax Types which you need to comply on or before the set dates.

Compensation Income

#TRAINlawDefinitionOfTerms

Compensation Income - in general, the term "compensation" means all remuneration for services performed by an employee for his employer under an employer-employee relationship, unless specifically excluded by the Code.

The name by which the remuneration for services is designated is immaterial. Thus, salaries, wages, emoluments and honoraria, allowances, commissions (e.g. transportation, representation, entertainment and the like); fees including director's fees, if the director is, at the same time, an employee of the employer/corporation; taxable bonuses and fringe benefits except those which are subject to the fringe benefits tax under Sec. 33 of the Code; taxable pensions and retirement pay; and other income of a similar nature constitute compensation income.