INTRODUCTION TO TAXATION
INTRODUCTION TO TAXATION
Why do we pay taxes?
What is the point of
taxation?
TAXATION
is the compulsory contribution
that people pay to the
government, which is used to pay
for expenses.
INCOME TAXATION
is the imposition of taxes on the
income of individuals derived from
compensation, business trade, self-
employed or practice of a profession
or from property less deductions
authorized by the law.
GROSS INCOME
Refers to all income derived from
whatever source.
COMPENSATION INCOME
COMPENSATION INCOME
COMPENSATION INCOME
DE MINIMIS BENEFITS
DE MINIMIS BENEFITS
ALLOWABLE DEDUCTIONS
1. Social Security System for private
employees and self employed
2. Government Service Insurance System for
government employees
3. Philippine Health Insurance Corporation
4. Home Development Mutual Fund
5. Union dues
6. Compensation for injuries or sickness
Under the Republic Act (RA) No. 10963
(Tax Reform Act for Acceleration and Inclusion (TRAIN))
eliminates the personal exemption of
P50,000 and the additional exemption of
P25,000. Employers required to withhold
taxes on compensation for employees,
which means that the salaries or wages the
employee receives as the "take-home pay"
are already net of the associated income
tax.
Under the Republic Act (RA) No. 10963
(Tax Reform Act for Acceleration and Inclusion (TRAIN))
Taxes can withhold either monthly
(every 30th for month's total
compensation) or on a semi-monthly
basis (every 15th and 30th for the
two-week compensation each of
those dates.
TAXABLE INCOME
is gross income minus deductions
allowed by law.
TAX DUE
amount of tax to be paid to the
government by a taxpayer.
TAX SCHEDULE
ILLUSTRATION A
1. How much is the taxable income for year
2023?
2. How much is tax due for year 2023?
ILLUSTRATION A
1. How much is the taxable income for year 2023?
Basic Salary Php 25,000 x 12 mos. = Php 300,000
Less: Deductions
SSS Contribution Php 581 x 12 mos. 6,972
PhilHealth Contribution Php 325x 12 mos. 3,900
Pagibig contribution Php 100 x 12 mos = 1,200 12,072
Taxable Income Php 287,928
ILLUSTRATION A
How much is tax due for year 2023?
Taxable Income Php 287,928
Less 250,000
37,928
x 15%
Tax Due 5,689.20
ILLUSTRATION B
If the taxable income is Php 420,000.
How much is tax due for year 2023?
Taxable Income Php 420,000
Less 400,000
20,000
x 25%
5,000
+ 22,500
Tax Due 27,500
ACTIVITY 5
Yellow paper. Compute for ff. (1 point – correct solution; 1 point – correct answer)
The monthly salary of employee A is Php 20,000.
1. How much is the total share of contribution of A to SSS
Contribution for the year 2023?
2. How much is the total share of contribution of A to
PhilHealth Contribution for the year 2023?
3. How much is the total share of contribution of A to Pag-Ibig
Contribution for the year 2023?
4. How much is the taxable income of A for the year 2023?
5. How much is the tax due of A for the year 2023?
