Self-employed

#TRAINlawDefinitionOfTerms

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

#TRAINlawDefinitionOfTerms

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

#TRAINlawDefinitionOfTerms

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

#TRAINlawDefinitionOfTerms

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

#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 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

#TRAINlawDefinitionOfTerms

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

#TRAINlawDefinitionOfTerms

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