What is the BIR Alphalist? Learn more about its purpose, its components, and its role in the overall success of your organization.
In the Philippines, employers are required by law to compute, deduct, and withhold part of the value of their employees’ compensation or salary payment before the actual payment goes out to their employees for every payroll cycle. To document all these, the employee needs BIR Form 1604-C.
In this regard, BIR Form 1604-C is a key annual payroll-related tax return that every employer in the country must file.
The purpose of this is to confirm the value of the tax on compensation withheld from their employees during the previous calendar year.
Related: BIR Forms Every Employer and Employee Should Get Familiar With
What is the BIR Alphalist of Employees?
To bolster tax compliance within the Philippines, the Bureau of Internal Revenue (BIR) introduced Revenue Regulations No. 1-2014. Under this regulation, all employers are mandated to furnish the BIR with an alphabetical list, commonly known as the BIR Alphalist of Employees.
This list includes both employees and payees whose income payments are subject to withholding taxes as specified in Philippine Revenue Rules.
This document serves as an attachment to BIR forms related to income tax withheld, such as the following:
- BIR Form No. 1604-CF, or annual information return on compensation and final withholding taxes;
- BIR Form No. 1604-E, or annual information return on expanded withholding tax;
- BIR Form No. 1601-E, or monthly remittance return on expanded withholding tax;
- BIR Form No. 1601-C, or monthly remittance return on withholding tax on compensation;
- BIR Form No. 1601-F, or monthly remittance return, on final withholding tax
The alphalist contains the names of employees and their Tax Identification Numbers (TINs).
Additional information included in the alphalist are:
- Gross compensation paid by the employees’ present and former employers within the calendar year,
- Income tax withheld and deducted from the employees’ salaries
- Computations for either tax refunds or tax payable at the end of the calendar year
The Alphabetical List of Employees/Payees from Whom Taxes Were Withheld is a required attachment that you need to include in your annual information return.
The Alphalists are provided in two sets: one that is exclusively for your minimum wage earners (MWEs) and one that is for non-MWES.
Hence, the Alphalist must contain the following three (3) documents:
- Employees who had no previous employers during the financial year
- Employees who had previous employers during the financial year
- Employees who are terminated before the end of the financial year
Who is required to submit the BIR Alphalist of employees?
The BIR Form 1604-C must be filed by every employer, withholding agent, and payer in the Philippines. These authorized personnel are required to deduct and withhold taxes on compensation paid to their employees.
Employers may fall into the following categories:
- individual
- estate
- trust
- partnership
- corporation
- government-controlled corporation
- government agency and instrumentality
- local government unit (LGU)
- or any other juridical entity
Moreover, if the recognized taxpayer is a corporation, the tax return is made under the name of the corporation. Lastly, the company’s authorized officer must sign and verify the document.
The employer must submit the alphalists with the appropriate BIR forms through the following portals:
- Electronic Filing and Payment System (eFPS)
- Electronic submission using the BIR’s website
- As email attachments to dedicated BIR email addresses using the prescribed CSV data file format
Employer responsibilities
- Ensuring the correct amount: It is the employer’s responsibility to ensure that the amount of compensatory tax withheld from employees’ pay during each financial year is correct and filed with the BIR every month.
- Submission of the BIR Form 1604-C: The employers must then submit BIR Form 1604-C at the end of each financial year as evidence that the correct amount of withholding tax on compensation has been deducted.
Employers can refer to the tax rates for and nature of income payments subject to withholding tax on compensation and final withholding taxes through BIR Forms 1601-C and 1601-F, respectively. In other words, it is the employer’s responsibility to complete and file BIR Form 1604-C, not that of the employee.
When to submit the Alphalist of employees
In the Philippines, you need to submit the Alphalist of Employees by January 31 each year.
This submission covers data from the previous calendar year and is essential for tax compliance. Moreover, the deadline aligns with the annual tax calendar, facilitating efficient processing and accurate tax collection by the Bureau of Internal Revenue (BIR).
The BIR Form 1604-CF (Annual Information Return of Income Taxes Withheld on Compensation and Final Withholding Taxes)
The BIR Form 1604-C details the Annual Information Return of Income Taxes Withheld on Compensation.
All employers in the Philippines must file this document to officially declare the amount of taxes they have withheld from employees’ compensation through the entire fiscal year.
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