Queries on Tax Status of Specific Employees

November 25, 1966 BIR RULING NO. 063-66 Mr. Dominador Batoon, Sr. Butuan City S i r : This refers to your letter dated October 1, 1966 wherein you posed the following queries: aisadc "(1) A single proprietorship businessman employs two helpers in his store. The third employee is his son. Single and over 23 years old. His son is the acting manager and received salaries also. Is there any law prohibiting the son to receive salaries from his father?" "(2) An employee gets married in the middle of the year. When he filed his income tax return for that year, is he allowed to deduct exemptions of P3000 as married?" "(3) An employee with single status whose withholding tax for the month say P12.50. When he married, the withholding tax will be reduced to say P7.00. Is this deduction in order?" In reply, I have the honor to inform you as follows, to wit: (1) There is no law prohibiting the father from employing his children who are of age in the pursuit of a legitimate trade or business. Consequently, for services rendered, the son can legally receive the corresponding compensation from his employer father. (2) This Office has consistently ruled that the status of a taxpayer is determined at the end of the taxable year. Hence, a person who gets married during but before the end of the taxable year, is entitled to claim the personal exemption of P3,000.00. (3) Pursuant to Revenue Regulations No. V-70, a tax of P12.50 is withheld every month from employees receiving a monthly salary of P480.00 but less than P500.00. For a married person or head of the family receiving the same salary, the proper amount of tax to be withheld is P6.50. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue