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Of Christmas Bonuses and Incentives

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1 Of Christmas Bonuses and Incentives on Sun Dec 18, 2016 8:55 pm

woman of the world


Arresto Menor
Hello! I hope you can shed light on this concern of ours.
I work in an educational institution and every year, we receive our 13th month pay in October while we get 40% of our basic pay as our Christmas bonus and a cash gift amounting to P20, 000 in December. We receive all of these benefits tax-free (except for those whose salaries exceed the tax exemption, their 13th month is taxed). This year however is an exemption as to our shock and dismay, we didn't get the total amount (of the 40% of salary Christmas bonus + P20, 000 that we expect). Everyone was taxed regardless of one's salary. We just found out about it when we checked our ATM payroll accounts. There was no memo about it and neither was the explanation behind it verbalized during our assembly right before our Christmas break started. The Christmas card we would always receive reflected the expected amount except that this time there is a small note which states that it's subject to witholding tax. It isn't clear to us if only one or both of the Christmas incentives accorded to us was/were subjected to tax.

I tried looking for references here on the Internet that can explain the reason behind this move but I couldn't find one. I only encountered news articles and websites about tax exemptions for Christmas bonuses and 13th month pay not exceeding P82, 000. Definitely, mine is way below P82, 000.

It is for this reason that I'm turning to this forum for help. I hope there are people out there who can enlighten me on this particular concern.

Thank you! Merry Christmas!

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