Case Analysis 1.1

Mr. Mao was an employee in a private company way back in 2018 where his position is a line supervisor that ranks a salary of P350,000.00 annually. Because he is dedicated, hardworking and an efficient labourer after two years he was promoted to a top managerial position where his monthly salary now is P550,000.00. He signed another three (3) years of contract in the same position.

Refer to table from the BIR Income Tax Rate

Question:

1. How much did Mr. Mao pay in his taxes at the year-end 2018?

2. How much did he pay his taxes after he was promoted?

3. How much will he pay after three (3) years in the company?

(a) Tax schedule effective Jan.1,2018 until Dec.31,2022

Not over P250,000 ---- 0%

Over P250,000 but not over P400,000 ---- 20% of the excess over P250,000

Over P400,000 but not over P800,000 ---- P30,000-25% of the excess over P400,000

Over P800,000 but not over P2,000,000 ---- P30,000-30% of the excess over P800,000

Over P2,000,000 but not over P8,000,000 ---- P490,000-32% of the excess over P2,000,000

Over P8,000,000 ---- P2,410,000-35% of the excess over P8,000,000

Tax schedule effective January.1,2023 and onwards.

Not over P250,000 ---- 0%

Over P250,000 but not over P400,000 ---- 15% of the excess over P250,000

Over P400,00 but not over P800,000 ---- P22,500-20% of the excess over P400,000

Over P800,000 but not over P2,000,000 ---- P102,500-25% of the excess over P800,000

Over P2,000,000 but not over P8,000,000 ---- P402,500-30% of the excess over P2,000,000

Over P8,000,000 ---- P2,202,500-35% of the excess over P8,000,000