BIR Form 2316: A Complete Guide for Philippine Employers

What Is BIR Form 2316?

BIR Form 2316 is the Certificate of Compensation Payment/Tax Withheld. It is a document issued by an employer to each employee certifying:

The total compensation paid during the year (or the period of employment)
The total withholding tax deducted from that compensation
The employee's non-taxable compensation items (13th month pay, de minimis, COLA)
The final status of the employee's annualized withholding (over-withheld, under-withheld, or balanced)

Under Revenue Regulations 11-2018 and the TRAIN Law, employees whose sole income is compensation from a single employer are covered by substituted filing — the employer files on their behalf, and the 2316 they receive becomes their substitute ITR.

Who Must Receive Form 2316?

Every employee who received compensation during the year must receive a 2316 — no exceptions:

Regular employees (full-time, part-time)
Contractual employees (job orders, project-based)
Employees who resigned or were terminated during the year
Minimum wage earners (even though exempt from income tax)
Employees with zero taxable income

Critical: Failing to issue Form 2316 to separated employees is one of the most common BIR violations during labor arbitration cases. An employee can use non-issuance of 2316 as evidence in an NLRC complaint.

Part I — Employer and Employee Information

Field	What to fill in
TIN (Employer)	Employer's 9-digit TIN
RDO Code	Revenue District Office where employer is registered
Registered Name	Employer's registered business name
Category	Private, Government, etc.
Employee TIN	Employee's 9-digit TIN (required — no TIN = no substituted filing)
Employee Name / Address	As on the employment record
Date of Employment	Start date, or January 1 if employed the whole year
Date of Termination	Only for separated employees
Statutory Minimum Wage Earner	Tick if applicable — entire compensation row is tax-exempt

Part II — Non-Taxable Compensation

List each non-taxable item separately. Common Philippine items:

Item	Exemption Ceiling
13th Month Pay	₱90,000 per year (any excess is taxable)
De minimis benefits (rice allowance, uniform, medical)	Per item ceilings per RR 11-2018
SSS / PhilHealth / Pag-IBIG employee contributions	Fully exempt (actual amount deducted)
GSIS / HDMF contributions (government employees)	Fully exempt

Note: Rice subsidy ceiling is ₱2,000/month (₱24,000/year). Uniform/clothing allowance: ₱6,000/year. Medical cash allowance to dependents: ₱1,500/employee/semester (₱3,000/year). Laundry allowance: ₱300/month. Amounts above these ceilings become taxable compensation.

Part III — Taxable Compensation and Tax Withheld

This section is the heart of the form:

Regular Compensation: Monthly salary, fixed allowances above de minimis, and other regular pay that form part of the taxable compensation package
Supplemental Compensation: Bonuses, commissions, overtime pay, hazard pay, and other non-regular taxable items
Total Taxable Compensation: Regular + Supplemental
Total Tax Withheld: Sum of all withholding tax deducted throughout the year (from payroll records)
Tax Refunded or Paid: For year-end adjustment. If over-withheld, excess is refunded by the employer in January. If under-withheld, employee pays the shortfall.

Year-End Adjustments (Annualization)

Before issuing Form 2316, employers must perform the year-end tax computation (annualization) in December's payroll:

Sum all taxable compensation for the full year (January–December)
Apply TRAIN Law tax table to get the correct annual tax
Compare against total tax withheld throughout the year
If over-withheld: refund the difference to the employee on the last payroll
If under-withheld: collect the shortfall in the last payroll

The refund or collection is reflected in the "Tax Refunded or Paid" field of the 2316.

Deadlines

Situation	Deadline
Regular employees (year-end)	January 31 of the following year
Employee separates during the year	Within 30 days after the date of last payment
BIR alphalist submission (7.2 DAT file)	February 28 of the following year

How to Submit the Alphalist (BIR 7.2 Data Entry Module)

If your company has more than 10 employees covered by substituted filing, you are required to submit the alphalist of employees as a DAT file generated by the BIR 7.2 Data Entry Module:

Download the BIR 7.2 Data Entry Module from the BIR website
Encode all employees' 2316 data into the module
Generate the DAT file (alphalist)
Submit the DAT file via eFPS or by bringing it to your RDO on a USB drive by February 28

Employers with 10 or fewer employees may submit manual 2316s directly to their RDO, or file via eFPS.

Frequently Asked Questions

Does a minimum wage earner still need a Form 2316?

Yes. Even though minimum wage earners are exempt from income tax, an employer must still issue Form 2316 to document the compensation paid. The form will show ₱0 tax withheld, confirming the employee's exempt status for BIR records.

What if an employee has two employers in the same year?

The employee is NOT covered by substituted filing that year. Both employers issue separate 2316s (for their respective periods). The employee must file their own ITR (BIR Form 1700) to consolidate income and tax from both sources and settle any under-withholding.

What is the penalty for not issuing Form 2316?

Under Section 255 of the Tax Code, failure to issue 2316 is a willful failure to supply correct information, subject to a fine of not less than ₱10,000 per return and potential imprisonment for a period of not more than 10 years. Practically, BIR enforces this through compromise penalties during audits.

Can Form 2316 be issued electronically?

Yes. Under RMC 18-2021, digitally signed electronic Form 2316 are acceptable, provided the employer uses a valid digital signature and the employee can access and print the document. Many payroll systems generate PDF-format 2316s that meet this requirement.