BIR Ruling [DA-264-97]

August 5, 1997 BIR RULING [DA-264-97] Department of Public Works and Highways Bureau of Equipment Region VII, Cebu City Attention: Mr. Pedro. C. Pajo Regional Equipment Engineer Gentlemen : This refers to your letter dated January 13, 1997, which was referred to this Office on January 21, 1997 by our Regional Director, Central Visayas, Cebu City, requesting clarification as to whether hazard pay is considered compensation income subject to withholding tax. In reply, please be informed that in BIR Ruling No. 266-93 dated June 18, 1993 this Office held that hazard pay is embraced within the term compensation, which means all remunerations for services performed by an employee for his employer unless specifically excepted under Sections 27, 28 (b) and 71 of the Tax Code, as amended. Compensation includes all income payments received as a result of an employer-employee relationship, such as salaries, wages, honoraria, bonus, taxable pensions, allowances, fringe benefits, fees and other income of similar nature. Such being the case, we hereby reiterate our opinion that hazard pay is considered as compensation income subject to withholding tax. HScAEC Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV OIC, Asst. Commissioner (Legal Service)