The BIR Form 1700 is the form you file as an employee earning PURELY from your employment. In this article, I’ll walk you through the basics and then into the nitty-gritty of filing this form.
Why do I have to file my income tax? Isn’t my employer supposed to do this?
When your employer files for you, that’s called substituted filing. You are eligible for that if:
- You received purely compensation income (regardless of the amount) during the taxable year;
- You received your compensation only from ONE employer in the Philippines during the taxable year;
- The tax withheld by your employer is equal to the amount of tax you’re supposed to pay – you can check the table from BIR’s Income Tax Page and see how much is your tax due.
- If you’re married, your spouse also complies with all three above conditions, or receives no income;
- Your employer files BIR Form 1604C; and
- You received a Form 2316 or Certificate of Final Tax Withheld At Source (BIR Form 2306) from your employer.
If ALL of the above are TRUE, then you shouldn’t have to file your own Annual ITR. If any was UNTRUE, you will have to file your OWN Annual ITR.
You may also be eligible for sustituted filing if your sole income was subjected to final withholding tax:
- You are a non-resident alien not engaged in trade or business in the Philippines (i.e., those whose stay in the Philippines did not exceed 180 days in any calendar year) who are subject to a final tax of 25%;
- You are an alien employed by regional operating headquarters, regional or area headquarters, offshore banking units and petroleum foreign service contractors/sub-contractors whose income is already subject to a final tax of 15%.
I got a Form 2307 instead of a Form 2316, what gives?
If you received a Form 2307, you are not an employee of the company – you, my friend, are an independent contractor. Head on over to Mommy Ginger’s excellent article, How Do I File My Annual Income Tax Return, to learn how to file in your case.
There are 3 different forms? Which one should I file?
If you earn from your business AND from your employment, then you file a Form 1701. Go here.
If you earn PURELY from your business AND you have opted in to 8% or OSD for the taxable year, then you file a Form 1701A. Go here.
If you earn PURELY from your business AND you have NOT opted in to 8% nor OSD for the taxable year, then you file a Form 1701. Go here..
If you are earning PURELY from Compensation Income (no sidelines), then you file a Form 1700. Read on.
Ok, I’m in the right place! So how do I file?
Alright, first of all, you need to download the BIR Form 1700. Download it from here.
Second, get all your 2316’s from all your employers from the taxable year.
Lastly, get a calculator or open your calculator app on your mobile.
First step, let’s fill out this section of the form (2nd page):
You fill out a row for each employer you had within the taxable year. For Employer #1, you put the details in Row #1 in the section named Continuation of Schedule 1. Employer #2 goes to Row #2, and so on.
For the boxes highlighted above, you get the details from this section of your Form 2316:
Next, add up the total compensation income and place them in the appropriate section in Form 1700 Part VI:
Copy this SUM into Row 42 of Form 1700 Part V.
Now, let’s fill out the rest of Part V.
Row 44 Gross Taxable Compensation Income: Value here is Row 42 – Row 43
Row 45 Other Taxable Non-Business/Non-Profession Income: If you received other taxable income from EMPLOYMENT, then enter it here. Chances are that you don’t, in which case, just enter a ZERO here.
Row 46 Total Taxable Income: Value here is Row 44 + Row 45
Row 47 Tax Due: Check how much you would have to pay based on the Graduated Income Tax table:
Row 54 Tax Withheld per BIR Form No 2316:
Row 55 Tax Paid in Return Previously Filed: If you filed a Form 1700 for this taxable year and you had to correct it, you would file an amendment. If you paid any amount for that filing, write down the amount here. (Note: If this IS an amendment, make sure you also tick YES in Item 2 at the very start of Form 1700). If this is NOT an amendment, keep this zero.
Row 56 Foreign Tax Credits: If you have any documentation proving you have deductible foreign tax credits, write it here. If none (or you’re unsure), keep this zero.
Row 57 Other Tax Credits/Payments: If you have any other credits/payments to deduct, write it here. If none (or you’re unsure), keep this zero.
Row 58 Total Tax Credits/Payments: This is the sum of rows 54 to 57
Row 60 Net Tax Payable/(Overpayment): This would be Item 47 minus Item 58. If this is a negative number, enclose it in parentheses.
Now we’re going back to Page 1 and filling that out…
Items 1-16 are self explanatory.
For Item 17, you can choose to file a Joint Filing OR Separate Filings. Tick the appropriate box.
Rows 26 Tax Due and 27 Less Total Tax Credits/Payments:
Row 28 Net Tax Payable/(Overpayment): Value here is Item 26 minus Item 27.
Row 29 Portion of Tax Payable for 2nd Installment: Yes if you’re payable is more than PHP 2000, you can opt to pay 50% or more NOW and then pay the rest of the amount on October 15. If you want to do that, enter the amount you want to pay LATER.
Row 30 Amount of Tax Payable: Value here is Row 28 minus Row 29.
Row 31 Surcharge: If you’re filing AFTER April 15, this would be 25% of the tax payable. If payable is zero or less, then this would be zero.
Row 32 Interest: If you’re filing AFTER April 15, apply a 12% p.a. interest rate on the tax payable. If payable is zero or less, then this would be zero.
Row 33 Compromise: If you’re filing AFTER April 15, you write down an amount based on this table:
Row 34 Total Penalties: Simply the sum of Rows 31 to 33.
Row 35 Total Amount Payable: This is the sum of Row 30 and Row 34.
Row 36 Aggregate Amount Payable: If you’re filing a JOINT filing, add up YOUR Total Amount Payable plus your SPOUSE’s Total Amount Payable.
Lastly, sign all the fields that require your signature and that’s it. You’re done. 🙂
Hey, I’m a NRANETB (25% Tax) – you ignored me!
Ah, simply fill out Part V.B instead of Part V.A and that’s it! Everything else is the same. 🙂
Whew! Ok, I think I got this.
Oh, if you have any amounts, payable, don’t forget to pay this at your accredited bank!
Wait, oo nga. What do I do with this form??
Make sure to file your form via eBIRForms. Once submitted, print out 3 copies, bring those copies to your RDO’s accredited bank (not just any bank), provide the docs, and the payments.
That’s it. You’re done. Sit back, relax, watch 100 Humans on Netflix. It’s super funny. 🙂