Binay

OT pay, 13th month, should be tax-free – Mayor Abby Binay

January 23, 2025 People's Journal 241 views

MAKATI Mayor and senatorial aspirant Abby Binay today said she will push for tax exemptions for the 13th-month pay and overtime pay of workers in both private and public sectors.

Binay said the tax exemptions will bring much relief to workers and their families in the form of disposal income for their basic needs.

“Kapag inalis mo yung tax sa overtime at 13th month, tataas ang disposable income ng manggagawa. Meron siyang dagdag na pambili ng pagkain, gamot, pambaon sa eskwela ng anak, yung basic needs,” Binay said. (Exempting overtime pay and 13th month from taxes will increase the disposable income of workers which they can use to buy food and medicine, provide allowance for children going to school, and other basic needs.)

She also cited the long-term economic impact of these exemptions.

“May domino effect yan. Tataas ang consumer spending, sisigla ang mga negosyo, tataas ang revenue collection ng gobyerno. Na-offset whatever revenue is lost,” Mayor Abby said. (It will have a domino effect. Increased consumer spending will drive sales and accelerate business growth, which will translate to higher revenue collection for the government. Whatever revenue is lost will be offset.)

The mayor also said the total exclusion of overtime pay and 13th month from taxable income will help Filipino families in the low to middle-income brackets cope better with rising inflation.

“Relieving the tax burden on workers will enable Filipino families, especially those in the low to middle-income sectors, to avoid falling deeper into poverty in the face of rising inflation,” she said.

The current Tax Code places a cap of P90,000 for the total amount of the 13th-month pay and other additional benefits, including the 14th month and performance bonus, to be considered non-taxable income. Any amount over P90,000 shall form part of the taxable income of employees.

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