Tax dues affect bonus of Capitol employees

With tax dues set aside, some employees of the Cebu Provincial Capitol find their yearend bonuses  lighter than expected.

Cebu Gov. Hilario Davide III said employees were already told that the bonuses are subject to withholding tax.

Those who received  less than P80,000 in bonuses for the whole year will get their incentives of P15,000 minus tax.  They will have a net bonus of P13,000.

For those who received more than P80,000, the excess will be subject to tax.

Provincial Accountant Marieto Ypil said some employees will no longer receive anything from the P15,000 incentives while others even need to pay to the government as the P15,000 is not enough to cover  remaining taxes due.

Capitol employees received four incentives and bonuses this year — the Productivity Enhancement Incentive (PEI)  equivalent to one month pay, the Collection Negotiation Agreement (CNA) bonus, 13th month pay  and the recent Program on Awards and Incentives for Service Excellence (PRAISE)  incentive of P15,000.

Ypil explained that the  tax dues of some employees went up because of a change in their tax brackets or classification by the Bureau of Internal Revenue.

Some employees maximized their overtime up to 50% of the allowed period.

As a result they advanced to  a higher tax bracket which has corresponding higher dues. Employees who need to pay remaining tax dues are given until January to settle them.

To avoid the same irritant next year, the accounting office will  compute withholiding tax on a a semestral or quarterly  basis to spread out the payment.

Ypil said the Capitol usually computes the withholding tax  by  end of the year. This resulted in the deduction of the P15,000 PRAISE bonus.

Vice Gov. Agnes Magpale said the  Capitol wanted employees to feel upbeat about receiving incentives during Christmas. However, they can’t dodge  tax obligations with the  BIR.

Magpale advised the employees to increase their monthly tax deduction to spread the dues throughout the year.