June 17, 2020
The Bureau of Internal Revenue (BIR) has taken out the mayor’s permit as one of the requirements in business registration.
Commissioner Cesar Dulay pointed out that the BIR aims to expedite the process of establishing businesses in the Philippines.
It is continuously making reforms to ease the burden of entrepreneurs in submitting required documents.
The complete outsource of your payroll will save you time, it is worry-free and ensures the satisfaction of your employees.
Whether you have 10 employees or 10,000, there are provisions guaranteed by the Department of Labor and Employment (DOLE) that must be included in payroll computation. As payroll service providers, The BGC Company can handle any business’s payroll requirements – from large BPO corporations with hundreds of employees, to small office enterprises with just a handful of staff. Our accounting practices, in line with the ISO 9001:2008 standard, ensure that companies never overpay – or underpay – their employees, as well as provide them with the necessary employee benefits.
To provide employees with the highest amount of net income from their monthly salary, The BGC Company can use specific payroll structures allowed by the Bureau of Internal Revenue (BIR) to maximize tax shielding and minimize salary deductions.
BGC works with a cutting-edge payroll platform specifically designed for Philippine requirements. With both client-based and online versions available, companies can opt for either an internet- or intranet-based system, which also allows the upper management to completely monitor and control payroll proceedings. The platform also features customizable restriction and access for different levels of staff, which can help reduce the time spent by HR personnel on payroll activities.
Our accounting and outsourced payroll services department can process your company’s requirements bi-monthly and sends the necessary files to the management for verification. Payslips may be: emailed directly to the staff, accessed online, or printed out and delivered directly to your office premises.
OUR PAYROLL SERVICES IN THE PHILIPPINES INCLUDE:
• Provision of online access to payroll files
• Web-based/online employee self-service
• Workflow for Sick Leave, Vacation Leave, Overtime, and Expense Approval
• Provision or integration of electronic Bundy Clock or Bio-Metrics
• Settlement of withholding taxes and contributions to respective government agencies
• Preparation of payroll-related summaries and reports
Payroll is one of the core accounting functions in any company or organization; it is, of course, necessary to pay employees for the work they have contributed to the business. However, internal payroll often drains a company’s accounting and HR resources and leaves serious lapses in internal security and control. BGC’s tax lawyers and payroll specialists will sit down with you and help your construct a payroll plan that will meet all of your company’s various need.
Steps of Payroll Processing
1. GATHER AND COLLATE
We gather the monthly timesheets and other payroll instructions
2. ANALYZE AND PROCESS
We conduct computations on the gross salary, withholding income tax, and government contributions due to each employee
3. REVIEW AND FINALIZE
All payroll reports undergo 3-tier internal reviews before they are sent to clients for review and approval; once approved, final reports are generated
4. REPORT AND FULFILL
We submit final reports to appropriate offices, execute payments, and comply with necessary policies
Our List of Requirements for Processing Your Payroll
• Employee details and a copy of the Contract of Employment for each employee
• BIR Form 2316 from previous employer
• Monthly timesheet details, including the number of hours worked, overtime hours, tardiness, and absences
• Payroll register showing individual salaries due to each employee with the corresponding payroll taxes withheld and deductions for SSS, Philhealth, and HDMF for each period
• Bank transmittal report reflecting the name of the employees, their corresponding net pay, and individual bank account number where the payroll amount shall be credited
Steps in Reporting New Employees to SSS, Philhealth, Pag-Ibig, and BIR
As an employer or a registered business operating in the Philippines, it is mandatory for you to register your every new employee or update your existing employees’ data with the Bureau of Internal Revenue (BIR), Social Security System (SSS) Philippine Health Insurance Corporation (PHIC) or Philhealth , and Home Development Mutual Fund (HDMF) also known as Pag-ibig. The employer is liable should the company fail to remit and/or update the employee’s status with the government agencies mentioned in this article.
Bureau of Internal Revenue (BIR) Employee Registration
BIR Registration for New Employee Without a Tax Identification Number (TIN) You shall require your new employee to file a BIR Form 1902 to the Revenue District Office (RDO) where your principal place of business is registered.
BIR Registration for New Employee with TIN No.
If your new employee has his/her TIN No and the previous employer is located in the same RDO as your company, the new employee shall submit BIR Form 2305 to the same RDO to update the BIR of his/her new employment. If his/her previous employer is located in a different RDO, the employee shall submit a BIR Form 1905 in the RDO where his/her previous employer is registered.
Social Security System (SSS) Employee Registration
SSS Registration for New Employees
Republic Act No. 8282 states that all employees hired by a private company are required to be members of the Social Security System (SSS). The member’s monthly contributions are deducted based on their actual monthly salaries, 30% of which is deducted to the employee and 70% is subsidized by the employer. These contributions are then availed through monetary assistance from SSS when the member is in need. Some situations include sickness/hospitalization, maternity, retirement, death or any other incident that will result in a member’s inability to produce his/her own income or any other financial difficulty.
For new employees without any SSS No, employers shall require their new employee to register in the SSS office where the company is registered. Once processed, the employee must provide the employer his/her SSS No.
Employees who are existing SSS members must submit their SSS No. to their employers.
Employers are also required to fill up the SSS Form R1A which contains the list of new employees with their respective SSS numbers. The SSS Form R1A shall be submitted to the SSS office where your company is registered. Online submissions are available for the SSS Form R1A.
Philippine Health Insurance Corporation (PHIC) Employee Registration
As stated in Republic Act 7875, all employees are mandated to be members and provide monthly contributions to the Philippine Health Insurance Corporation (PHIC), a medical insurance company in the Philippines. PHIC provides its members with health and hospitalization subsidies should they or their dependent/s be hospitalized. The member’s monthly contributions are deducted based on the member’s actual monthly salary.
New employees must fill up and sign a PHIC Form PMRF regardless if they are existing members of PHIC. These forms are then submitted by the employer to the PHIC office where the company is registered. Employers are also required to submit a PHIC Form ER2. This form contains the list of new employees and is submitted to the PHIC office where the company is registered.
Home Development Mutual Fund (HDMF) Employee Registration
Republic Act 7835 mandates employers to contribute to HDMF agency on behalf of their employees. The Home Development Mutual Fund (HDMF) also known as Pag-ibig, is a government agency providing housing and land acquisition loans to its members with the lowest interest rate. These loans are payable up to 30 years.
New employees are required to register as a member of HDMF online and must be registered as an SSS member first before registering with HDMF. Employers can submit the list of their new employees by filling up the HDMF Form MCRF and marking the new employees as NH (Newly Hire) when filing the monthly HDMF contributions or through the Pag-ibig online web portal.
All forms mentioned in this article are found in the government agencies’ respective websites.
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