This is the first guest post of many to come from Kevin Jay B Umali, a CPA in the Philippines.
Wondering how to prepare an alphabetical list (alphalist) of employees to comply with regulatory requirements? Thinking that you fell asleep when this was discussed in school? Well, you are one of the many process owners who ask on how to do it. As common as it may seem, the Bureau of Internal Revenue (BIR) has issued certain guidelines and basic information requirements in preparing a company’s alphalist. Such guidelines are released through BIR Revenue Regulations (RR).
The general guidelines are enumerated in Section 2.83.2 of RR 2-98, as amended by RR 10-08. The portions relevant to creating an alphalist are mentioned in Section (B) quoted hereunder, for your reference.
“(B) The alphabetical list of employees must show the following:
(1) Name and TIN of employees;
(2) Gross compensation paid by present and previous employers for the calendar year;
(3) (a) Taxable 13th month pay/other benefits for the rank and file employees; (b)
Taxable fringe benefits for managerial employees;
(4) Non-taxable 13th month pay/other benefits (Present employer);
(5) Non-taxable statutory minimum wage;
(6) Non-taxable holiday pay, overtime pay, night shift differential pay and hazard pay
(minimum wage earners only);
(7) (a) For 2008, Amount of Exemptions (January 1 to July 5, 2008) and Amount of
Exemptions (July 6 to December 31, 2008); (b) For 2009 and thereafter, Amount of Exemptions;
(8) Amount of premium payments on health and/or hospitalization insurance not exceeding P2,400.00, if any;
(9) Tax required to be withheld computed in accordance with Sec. 24 (A) of the Code;
(10) Tax withheld by all present employers for the calendar year; and
(11) Adjustment, if any.
(C) The alphabetical list of employees shall be prepared indicating, among others, separate listings of the following:
(1) Employees Separated/Terminated before December 31 of the taxable year (indicate date of separation/termination);
(2) Employees whose compensation income are exempt from withholding tax BUT subject to income tax;
(3) Employees whose total compensation income are exempt from withholding tax and not subject to income tax (indicate if MWE);
(4) Employees as of December 31 of the taxable year with no previous employment within the year;
(5) Employees as of December 31 of the taxable year with previous employment within the year;
(6) Employees who received Fringe Benefits subjected to Fringe Benefit Tax;
(7) Alien employees subject to withholding tax.
Employers with centralized accounting system, or those mandated to consolidate remittances (e.g. large taxpayers), shall prepare alphalists on a regional basis or per branch office, due to the identification of SMW per region where the employee is assigned, which shall be submitted to the BIR where the head office is located.
In cases where no information was provided by a previous employer, such fact shall be stated in BIR Form No. 1604-CF and the present employer shall not be liable to any penalties.”
We hope that you find the foregoing sufficient for your purpose.
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Please be guided that this post is intended for general information only and not for the purpose of providing legal and/or professional advice. Contact your attorney to obtain advice with respect to any particular issue or problem. The opinions expressed at or through this post are the opinions of the individual author and may not reflect the opinions of any individual attorney. As the author of this post, I am disclaiming any liability from direct or indirect use of this material.