Sunday, January 22, 2017

Guide in Computing your BIR Income Tax in the Philippines

Below are the basic things to consider in computing income tax.
  • Basic Salary of employee
  • Employee Status
  • How many dependent does employee have
  • Your benefits deduction such as (SSS, PAGIBIG, and PHILHEALTH contributions)
  • Does employee have any allowance or benefits
  • BIR Tax Table

In order to understand this, let set an example. Elmer has the following information below:

Basic Salary = Php 14,000.00
Status = Single or S/ME
Overtime Pay = Php 1,500.00
SSS Contribution = Php 508.70
PAGIBIG Contribution = Php 100.00
PHILHEALTH Contribution = Php 175.00

Problem: Compute its monthly taxable income?

Solution:
Taxable Income = (Basic Pay + Holiday Pay + Overtime + Night Differential) – (Absences + Tardiness + SSS + PAGIBIG + PHILHEALTH contribution)

Taxable income = [(14,000+1,500) – (508.70+100+175)]
                                = 15,500 – 783.7
                                = Php 14,716.30

So, Elmer taxable income is amounting 14,716.30. Next thing you do is to refer to the BIR tax table
bir tax table

In the above example our taxpayer is a single with no qualified dependent. Therefore, Elmer tax for the month is 708.33 + 20% over.
Now, Lets compute the income tax of Mr. Elmer
TAX = 708.33 + 20% (14,716.30 – 10,000)
                = 708.33 + 20% (4,716.30)
                = 708.33 + 943.26
                = 1,651.59

Elmer income tax in a month would be amounting to Php 1,651.59.

Note: Employee with minimum wage earners: as defined in Section 22(HH) of BIR tax Code shall be exempt from the payment of income tax on their taxable income: provided, further, that the overtime pay, holiday pay, night differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax. 

Hope this article would help you in finding how much does your company deduct in your income tax. If you think this article is a great help, would you mine share it to other by simply clicking the social sharer button below.
               
See Also: 

Sunday, December 18, 2016

What is a REA model Approach? And how does it help you?

rea model approach

REA refers Resource, events and Agents. It is a model by which you can improve as well as re-engineer the accounting system. It was originated by accounting model that is why it is famous. It helps you to combine the resources, events and agents easily. It is very helpful for the business process of the company.

How does the REA model help a business?

Most of the business has some issues with the departments for the resources and events as well as agents that need to be fixed. The REA for accounting approach solves all the issues in the business for the sales, purchase and another department. There might be human resource and financing malfunctioning issues. This suggests the alternative models for the business. 

Why is the REA popular model?

When it comes to teaching accounting information system or AIS, then REA is a common and vital chapter, which contains business practices. There are many companies, which have issues with the warehouse. The REA model shows how to remodel the current ERP system by implementing the updates in the ERP system.

How does the REA model increase the productivity?

The REA model provides the right tools by which the condition of the business can be improved. There are new implementations of the data models, which are extremely helpful for the process of thedata model. You will have the update on the following system.
  • Goods and service as well as resources. It will help you to save money i.e. resources.
  • The REA model is quite helpful for the business transaction and agreements that directly and indirectly affects the resources. It is very helpful to manage the events. 
  • It will provide efficient support for the human agencies and people that are also known as events. 
  • There is a new approach, which will replace the old business modelling.
The REA model also shows how to change and alter the market by altering the three important values in the system. Apart from that the REA model also reveals why the inadequate business process can be dangerous for the entire business. It also helps you to trace all the business transaction related to the resources and agents.

See Also:
What are the benefits of accounting information system for business?
Advantages of using Accounting information system

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