Thursday, October 9, 2008

RA9504

RA9504 - This new law will exempt minimum wage earners from paying income tax, increasing tax exemption for all earners and additional exemptions for individuals with dependents/children.

Important things you need to know:

1. Anyone earning at least the minimum wage in his/her region will not pay income tax

2. Exemption extends to overtime pay, holiday pay, night shift differential and hazard pay of minimum wage earners only

3. RA 9504 grants a P50,000 tax exemption regardless of status. (Single/Married/Head of the family)

"Sec 4. Section 35 (A) and (B) of Republic Act 8424, as amended otherwise known as the National Internal Revenue Code of 1997, is hereby amended to read as follows:
SEC 35. Allowance of Personal Exemption
(A) In General - For purposes of determining the tax provided in Section 24 (A) of this Title, there should be allowed a basic personal exemption [as follows:] AMOUNTING TO FIFTY THOUSAND PESOS (50,000) FOR EACH INDIVIDUAL TAXPAYER. "

4. The new law increases the exception to P25,000 per child maximum of 4 children.

" (B) Additional Exemption for Dependents - There shall be allowed an additional exemption of [Eight Thousand Pesos(8,000)] TWENTY-FIVE THOUSAND PESOS (25,000) for each dependent not exceeding four(4). "

5. RA8424 Chapter 3 Section 24:

“The tax shall be computed in accordance with and at the rates established in the following schedule:

“Not over P10,000 –> 5%

“Over P10,000 but not over P30,000 –> P500+10% of the excess over P10,000

“Over P30,000 but not over P70,000 –> P2,500+15% of the excess over P30,000

“Over P70,000 but not over P140,000 –> P8,500+20% of the excess over P70,000

“Over P140,000 but not over P250,000 –> P22,500+25% of the excess over P140,000

“Over P250,000 but not over P500,000 –> P50,000+30% of the excess over P250,000

“Over P500,000 –> P125,000+34% of the excess over P500,000 in 1998

Dig in and download the draft here (via Scribd)

You can also check this links:
Arroyo signs law on tax exemption for minimum wage earners
Arroyo signs tax exemption measure for minimum wage earner (1:43 pm)
Arroyo signs tax exemption bill into law Tuesday

1 comment:

zisa said...

hi there.

thanks for the information... i am searching for samples of non - taxable compensations,are these the fringe benefits that private offices are allowed to give to their employees? can you help me with specifics?

any idea? where do i find such?

thanks much.