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1603 Fringe benefit

Submission

Payment

Notes

Purpose

2017 Quarterly submission dates — bir-1603

    Due For period starting
  1. Tue, Jan 10, 2017 Sat, Oct 1, 2016
  2. Mon, Apr 10, 2017 Sun, Jan 1, 2017
  3. Mon, Jul 10, 2017 Sat, Apr 1, 2017
  4. Tue, Oct 10, 2017 Sat, Jul 1, 2017

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1603 Fringe benefit — Answers to your questions

  • The name of the 1603 is "Quarterly Remittance Return of Final Income Taxes Withheld".

  • The purpose of the 1603 is to file quarterly withholding tax taken out on fringe benefits granted to higher ranking employees.

  • To submit the form 1603, you must:

  • The form 1603 is to be submitted on the - 10th January, 10th April, 10th July and 10th October (10th day of the month following the end of the quarter)

    • If the submission date falls on a Saturday, Sunday or holiday, it must be submitted on the first working day AFTER.
    • The deadline for electronic filing and paying the taxes due via EFPS on or before the fifteenth (15th) day of the month following the end of the calendar.
  • For the 1603, you must - By cash or company check at the following accredited banks.

    • If using company check, don't combine multiple payments into one check.
    • Can also pay via GCash.

 Notes:

Your local RDO can receive payment if paying on the last day it is due. You can file this form at your Local Revenue District Office. In places where there is no Authorized Agent Banks, this form payment shall be filed and the tax paid with the Revenue Collection Officer or the Authorized City or Municipal Treasurer within the Revenue District where you are located.

  • For the 1603, you must submit 3 copies.

 Notes:

Forms must be submitted in triplicate, portrait and in long bond (US folio) size.

  • Fringe benefit tax is withholding tax withheld on the monetary value of the fringe benefit granted by the employer to an employee who holds a managerial or supervisory position.

 Notes:

A final withholding tax on the grossed-up monetary value of the fringe benefit granted by the employer to an employee who holds a managerial or supervisory position. FBT is treated as a final income tax on the employee which shall be withheld and paid by the employer on a quarterly basis.

 See also: http://www.bir.gov.ph/info-efps/Form%20Guidelines%20And%20Instructions/Form%201603%20Guidelines%20and%20Instructions.html

 And also: http://www.bir.gov.ph/taxcode/1638.htm

  • Fringe benefit is any good, service or other benefit furnished or granted by an employer in cash or in kind, in addition to basic salaries to employees (except rank and file employees).

  • The following employee fringe benefits are taxable: Housing, vehicle, household personnel, Interest on loan at less than market rate, leisure club fees, travel and holiday expenses, educational assitance, and insurance.

 Notes:

Fringe benefit means any good, service or other benefit furnished or granted by an employer in cash or in kind, in addition to basic salaries to employees (except rank and file employees) such as, but not limited to the following:

  • Housing
  • Expense account
  • Vehicle of any kind
  • Household personnel, such as maid, driver and others
  • Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted
  • Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations
  • Expenses for foreign travel
  • Holiday and vacation expenses
  • Educational assistance to the employee or his dependents and
  • Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.

 See also: http://www.bir.gov.ph/taxcode/1638.htm

 And also: http://www.bir.gov.ph/info-efps/Form%20Guidelines%20And%20Instructions/Form%201603%20Guidelines%20and%20Instructions.html

  • The following employee benefits are not covered by Fringe Benefit Tax: de minimis benefits, benefits which are given to employees who are involuntarily separated from work, contributions of the employer for the benefit of the employee to retirement, insurance and hospitalization benefit plans, Benefits given to the rank and file.

 Notes:

The following employee benefits are not covered by Fringe Benefit Tax:

  1. Fringe benefits which are authorized and exempted from income tax under the Code or under special law. Separation benefits which are given to employees who are involuntarily separated from work are not subject to FBT.
  2. Contributions of the employer for the benefit of the employee to retirement, insurance and hospitalization benefit plans
  3. Benefits given to the rank and file, whether granted under a collective bargaining agreement or not
  4. De minimis benefits
  5. Benefits granted to employee as required by the nature of, or necessary to the trade, business or profession of the employer
  6. Benefits granted for the convenience of the employer

Although the benefit may be exempt from FBT, it may, however, still form part of the employee's gross compensation income which is subject to income tax, which is required to be covered by the withholding tax on wages.

 See also: http://www.bir.gov.ph/taxcode/1638.htm

  • The De Minimis benefits are benefits offered by an employer to his employees that are of relatively small value and are offered or furnished by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of his employees and are exempt from the fringe benefit tax.

 Notes:

The following are considered as 'de minimis' benefits granted to each employee as updated by Revenue Regulation (RR) 5-2011:

  • Monetized unused vacation leave credits of private employees not exceeding 10 days during the year
  • Monetized value of vacation and sick leave credits paid to government officials and employees
  • Medical cash allowance to dependents of employees not exceeding P750.00 per employee per semester or P125 per month
  • Rice subsidy of P1,500.00 or one (1) sack of 50-kg rice per month amounting to not more than P1,500.00
  • Uniforms and clothing allowance not exceeding P4,000 per annum
  • Actual medical assistance, e.g. medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding P10,000 per annum
  • Laundry allowance not exceeding P300 per month
  • Employees achievement awards, e.g., for length of service or safety achievement, which must be in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000.00 received by the employee under an established written plan which does not discriminate in favor of highly paid employees
  • Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum
  • Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the basic minimum wage on a per region basis.

All other benefits given by employers which are not included in the above enumeration shall not be considered as de minimis benefits, and hence, shall be subject to fringe benefit tax.

 See also: ftp://ftp.bir.gov.ph/webadmin1/pdf/42126rr%20no.%2010-2008.pdf






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