BIR Monthly Tax Deduction Remittance: A Complete Guide for Employers

BIR Monthly Tax Deduction Remittance: A Complete Guide for Employers

In the Philippines, every employer has a legal responsibility to withhold and remit taxes from their employees’ salaries to the Bureau of Internal Revenue (BIR). This process, known as BIR monthly tax deduction remittance, ensures that employees’ income taxes are collected at the source — making tax compliance smooth and transparent.

But many HR and accounting professionals still find the monthly filing process confusing.
This article will walk you through how BIR monthly tax deduction remittance works, what forms to use, deadlines to remember, and common mistakes to avoid.

What Is BIR Monthly Tax Deduction Remittance?

BIR monthly tax deduction remittance refers to the process where employers:

  1. Withhold income tax from employees’ monthly salaries (based on the withholding tax table).
  2. Remit those withheld taxes to the BIR within the prescribed deadline.
  3. File the appropriate tax form to report the transaction.

This system is guided by the “Pay-As-You-Earn (PAYE)” principle — meaning taxes are deducted every payroll period, not just once a year.

Key BIR Forms for Monthly Tax Remittance

To stay compliant, you must use the correct forms depending on the nature of the withholding:

  1. BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation)
  • Used for employee salary deductions.
  • Filed every month by employers who withhold taxes from compensation.
  • Includes total tax withheld for the month.
  1. BIR Form 1601-E (Expanded Withholding Tax)
  • Used for payments to suppliers, professionals, or freelancers (not regular employees).
  • Filed separately from Form 1601-C.
  1. BIR Form 0619-E and 0619-F
  • Used for remittance of expanded and final withholding taxes, respectively.
  • Often filed by companies with non-employee transactions.

Filing Deadlines You Must Remember

Timely filing is crucial to avoid penalties. Here’s a quick summary:

Type of WithholdingFormDeadline
Compensation (Employees)1601-COn or before the 10th day of the following month
Expanded Withholding (Suppliers, Freelancers)0619-EOn or before the 10th day of the following month
Final Withholding0619-FOn or before the 10th day of the following month

🕒 Example: For taxes withheld in October, file and remit on or before November 10.

If your company uses the eFPS (Electronic Filing and Payment System), the deadline may vary slightly depending on your assigned eFPS group.

How to File and Pay Your Monthly BIR Remittance

Option 1: Using the BIR eFPS (Electronic Filing and Payment System)

  1. Log in to your eFPS account at https://efps.bir.gov.ph.
  2. Select the appropriate BIR Form (e.g., 1601-C).
  3. Fill out the form with details such as total compensation, tax withheld, and TIN.
  4. Submit electronically and proceed to your accredited bank’s payment portal to complete the remittance.

Option 2: Using eBIRForms (For Non-eFPS Users)

  1. Download the eBIRForms package from https://www.bir.gov.ph.
  2. Fill out BIR Form 1601-C using the software.
  3. Generate the file reference number (FRN).
  4. Pay via: Authorized Agent Banks (AABs)
    GCash, PayMaya, or LANDBANK Link.BizPortal
    Over-the-counter at selected payment centers

How to Compute Monthly Tax Deductions

To compute the correct tax to withhold each month, follow these steps:

  1. Identify the employee’s monthly salary.
  2. Subtract mandatory deductions (SSS, PhilHealth, Pag-IBIG contributions).
  3. Use the BIR Withholding Tax Table (TRAIN Law) to determine the tax rate.
  4. Multiply the taxable income by the applicable rate.
  5. The result is the withholding tax to remit for that month.

🧮 Example:
Monthly salary: ₱35,000
Less contributions: ₱3,000
Taxable income: ₱32,000
Based on the BIR table, tax due ≈ ₱1,500–₱2,000 (depending on bracket)

Penalties for Late Filing or Payment

Non-compliance with BIR deadlines can result in:

  • 25% surcharge on tax due
  • 12% annual interest on unpaid taxes
  • ₱1,000–₱50,000 compromise penalty depending on the violation

These penalties can easily add up, so it’s best to file early or automate your BIR remittances using payroll software.

Tips for Accurate and Timely BIR Compliance

  1. Automate payroll processing with HRIS or accounting software that integrates BIR computations.
  2. Verify TINs and employee details to avoid mismatched records.
  3. Reconcile monthly and annual reports (Form 1601-C vs. 1604-C).
  4. Keep digital records for at least 3 years for audit purposes.
  5. Subscribe to BIR updates — deadlines and requirements may change under new regulations.

Simplify Compliance with HRIS Integration

Modern HRIS (Human Resource Information System) platforms can automatically compute, record, and even prepare BIR tax forms for submission.

Benefits include:

  • Accurate withholding computation based on real-time salary data.
  • Auto-generated reports for Forms 1601-C and 2316.
  • Seamless integration with eFPS or eBIRForms.
  • Reduced manual errors and faster monthly remittance.

By digitizing your payroll and tax process, you ensure compliance while saving hours of manual work each month.

Conclusion

Filing your BIR monthly tax deduction remittance correctly is more than just a legal duty — it’s part of maintaining employee trust and corporate integrity.

By understanding the right forms, deadlines, and computation methods, and by leveraging digital tools, HR and finance teams can ensure smooth and error-free compliance every month.

Remember: Timely remittance today avoids penalties tomorrow.

Share
Copy Link
×