Withholding Tax from Employee's Compensation for Work Done Outside the Company's Premises

October 5, 1959 BIR RULING NO. 570-59 The Manila Press, Inc. 492 Nueva St. M a n i l a Gentlemen : This has reference to your letter dated March 9, 1959, requesting information as to whether or not you are required to withhold tax from your employee's compensation for work done outside the company's premises. In said letter you furnished this Office with the following data: "The matter concerns work done outside of the company's premises, on a piece work basis, by our regular employees. "The work taken out of the company's premises by the employee, due to urgency of the work involved, is presumably being done by himself. However, such may not always be the case. The complication arises when the work, instead of being done by the employee himself, is re-assigned to another person at the discretion of the employee, in which the company has absolutely no control. Under the circumstances, the employee concerned has automatically assumed the roll of a contractor. For internal revenue purposes, are we supposed to withhold tax from the employee's compensation " for work done outside the company's premises " in addition to his regular earnings in the company?" In answer thereto, I have the honor to inform you that the work done by your employees outside of the company's premises partakes of the nature of overtime, and, as such, any additional compensation received by them by virtue thereof constitutes supplemental wage payments which must be aggregated with their regular earnings for purposes of the withholding tax. cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue