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Mary Joy P. Junio, Cpa Notre Dame of Midsayap College Midsayap, Cotabato

The document discusses how income taxes are estimated and withheld from employee paychecks throughout the year based on an estimate of their annual salary and deductions. It provides an example calculation showing how a monthly salary, overtime pay, deductions, and estimated annual taxes are used to determine the withholding amount for each pay period. The estimated annual salary is calculated and personal exemptions are subtracted to determine the net taxable income used to estimate the annual taxes and divide to the monthly withholding amount.

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Jonathan Junio
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96 views5 pages

Mary Joy P. Junio, Cpa Notre Dame of Midsayap College Midsayap, Cotabato

The document discusses how income taxes are estimated and withheld from employee paychecks throughout the year based on an estimate of their annual salary and deductions. It provides an example calculation showing how a monthly salary, overtime pay, deductions, and estimated annual taxes are used to determine the withholding amount for each pay period. The estimated annual salary is calculated and personal exemptions are subtracted to determine the net taxable income used to estimate the annual taxes and divide to the monthly withholding amount.

Uploaded by

Jonathan Junio
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MARY JOY P.

JUNIO, CPA Notre Dame of Midsayap College Midsayap, Cotabato

Are income taxes that are

temporarily based on estimate. The exact amount of taxable salary would only be determined at the end of the year when the last pay for the year is computed and paid.

Gross salary for the pay period x no. of paydays xx Less: Personal exemptions xx Health insurance paid xx xx Estimated net taxable income xx x Applicable tax rate % Estimated income tax for the year xxx Divided by the number of pay period xxx Estimated withholding tax for the payday xxx

Basic Salary per month


Overtime and holiday pay Gross Taxable Income

P18,000 7,000 25,000

Less: Deductions

Absences and tardiness P1,200.00 SSS, employees share 400.00 Philhealth 93.75 Pag-ibig 100.00 Union dues 360.00 Withholding taxes 4,166.67

Net take home pay

6,320.42 P18,679.58

Estimated salary for the year

(P25,000 x 12) Less: Personal exemption Net taxable income


Annual income tax P50,000 Divided by the number of months 12 Withhoding tax for the month P4,166.67

P300,000 50,000 250,000

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