Applicability of Tax Table for Income Tax Withholding Purposes

December 28, 1988 BIR RULING NO. 602-88 71 (a) 000-00 603-88 Gentlemen : This refers to your letter dated August 25, 1988 stating that you have recently added a new category of employment status termed as "Seasonal Staff"; that this is a non-regular appointment defined as those contracted to render services as technical, administrative, clerical/secretarial, and trade and crafts staff on a project "coterminous basis"; that those belonging to this employment category render regular office hours as the regular staff but the benefits that they may receive are subject to management approval; that currently, for withholding purposes, they are classified as Consultants/Professionals under the Expanded Withholding Tax System thus you are effecting a 10% deduction from their monthly compensation and that this practice, however, resulted to some clamor from said "Seasonal Stuff" that they be classified under the Gross Income Taxation as they are not really "consultants" as the word connotes. Based on the foregoing representations, you now request in effect a ruling as to what tax table is applicable for income tax withholding purposes. In reply, please be informed that under Section 2(a) of Revenue Regulations No. 6-82, as amended, implementing Section 71, Chapter X, Title II of the Tax Code, as amended by Batas Pambansa Blg. 135, for purposes of withholding tax, the term "Compensation" means all remuneration for services performed by an employee for his employer unless specifically excepted under Sections 27, 28 and 21 of the National Internal Revenue Code. Accordingly, and since your so called "Seasonal staff" are rendering services pursuant to their appointment in that Office, the compensation they are receiving from you as a consequence, thereof, is therefore, subject to the withholding tax prescribed under Section 71 of the Tax Code, as amended and not to the Expanded Withholding Tax System under Section 50(b) of the same Code, as implemented by Revenue Regulations No. 6-85. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner