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Taxable Cash Incentives

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1 Taxable Cash Incentives on Sun Apr 10, 2011 3:16 pm


Arresto Menor
Hi, good day..I am working at a call center here at Mandaluyong.I just want to ask regarding the Taxable Cash Incentives appeared on my payslip. What happened was our account had a raffle and I won a Sketchers watch. It so happened,a week after that my friend and I went to a mall.We checked the amount of that watch, its worth P1,795.00. Curious of how much tax will be deducted and what cut off pay it will show on my payslip, but then to my surprised -Feb 28 payslip showed a Cash Incentives Taxable amount of P2,095.00. Now, what I want to know is where that P300.00 extra came from? I request a dispute from my TL and he filed that (if I'm not mistaken on Mar. 11)I went to HR Dept make a follow up(last 03/17)and to ask someone who could I talk to regarding that but the lady said, (forgot to ask her name)I should make a follow up thru my TL which he did made another dispute last 03/25.The dispute is almost a month now. But still no respond from anyone concern. If no actions been done until next week.Can I file a legal complaint directly to BIR? should I seek a legal advise for this matter incase it got worst. Hope you can help me.Thanks.

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2 Re: Taxable Cash Incentives on Mon Apr 11, 2011 12:19 am


Reclusion Perpetua
Maybe they computed the incentive to include the tax payable, so net effect of that is you get the P1795 incentive whole and untaxed.

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3 Re: Taxable Cash Incentives on Mon Apr 11, 2011 11:27 am


Arresto Menor
Atty the 1,795.00 is the selling price of the watch.what i'm asking is why in my payslip the amount given there was 2,095.00?where that 300.00 extra came from? if say for example 10% of 1795.00 is taxable, 179.50 is taxed amount.If you will gonna add that to the 1,795 it wont even be 2095.00, right? My point is whatever amount of the prize/incentives should be clearly stated on our payslips-no more,no less.

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4 Re: Taxable Cash Incentives on Mon Apr 11, 2011 11:40 am


Reclusion Perpetua
then again, tax is not fixed at (for example) 10%. They compute tax and add it to your income so that your 1795 incentive is received whole.

It would probably be ok with the company to credit you with 1795 only. but then you'd complain that afterwards that you actually got less than 1795 because the whole amount was taxed.

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5 Re: Taxable Cash Incentives on Tue Apr 12, 2011 12:10 am


first of all, you have to determine what this cash incentive taxable amount really refers to. a watch is not cash so it should not have been place under that category. neither is it an incentive because you won it by chance.

are you the only employee who was imposed such a tax?

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6 Re: Taxable Cash Incentives on Tue Aug 26, 2014 3:52 pm


Arresto Menor
I know this is a fairly old post but I'd like to mention. From a financial perspective, if the company had placed the exact value of the watch then your salary would be shouldering the amount of the tax.

For example if you received a 1000php watch and say tax was 10%:

If they say the taxable incentive (fringe benefit) provided by the company is 1000 then the tax of 100php will be withheld from your salary. In which case you pay our 100php out of your own salary.

1000=amount shouldered by company
1000*1.10=1100 - Total +taxes
1100-1000=100 - Tax paid

If they say the taxable incentive (fringe benefit) provided by the company is 1111.11 then the tax of 111.11 (10% of 1111.11) will be withheld from your salary. In which case the company pays for the 111.11php.

1111.11=amount shouldered by company
1111.11*.10=111.11 Taxpaid
1111.11-111.11 or amount shouldered by company less the tax being shouldered by company = 1000

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7 Re: Taxable Cash Incentives on Sat Sep 13, 2014 3:48 am


Arresto Menor
Triscet, you need to ask first what the 2095 is for. The watch you have is not a cash incentive hence it should not be taxed. Is this is structured as a Bonus on your payslip. What does it state on your payslip, the amount of 2095?

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