New Law Increasing the Exemption for 13th Month Pay and Other Benefits (Republic Act 10653)

Republic of the Philippines
Congress of the Philippines
Metro Manila

REPUBLIC ACT NO. 10653

AN ACT ADJUSTING THE 13TH MONTH PAY AND OTHER BENEFITS CEILING EXCLUDED FROM THE COMPUTATION OF GROSS INCOME FOR PURPOSES OF INCOME TAXATION, AMENDING FOR THE PURPOSE SECTION 32(B), CHAPTER VI OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 32(B), Chapter VI of the National Internal Revenue Code of the Philippines (Republic Act No. 8424) is hereby amended as follows:

“SEC. 32. Gross Income. —

“x x x

“(B) Exclusions from Gross Income. — The following items shall not be included in gross income and shall be exempt from taxation under this Title:

“xxx

“(7) Miscellaneous Items. — “xxx

“(e) 13th Month Pay and Other Benefits. — Gross benefits received by officials and employees of public and private entities: Provided, however, That the total exclusion under this subparagraph shall not exceed eighty-two thousand pesos (P82,000) which shall cover:

“xxx

“(iv) Other benefits such as productivity incentives and Christmas bonus: Provided, That every three (3) years after the effectivity of this Act, the President of the Philippines shall adjust the amount herein stated to its present value using the Consumer Price Index (CPI), as published by the National Statistics Office (NSO).”

SEC. 2. Implementing Rules and Regulations. — The Secretary of Finance shall promulgate the necessary rules and regulations for the faithful and effective implementation of the provisions of this Act: Provided, That, the failure of the Secretary of Finance to promulgate the said rules and regulations shall not prevent the implementation of this Act upon its effectivity.

SEC. 3. Repealing Clause. — All laws, orders, issuances, circulars, rules and regulations or parts thereof which are inconsistent with the provisions of this Act are hereby repealed or modified accordingly.

SEC. 4. Separability Clause. — If any provision of this Act is declared unconstitutional or invalid, other parts or provisions hereof not affected thereby shall continue to be in full force and effect.

SEC. 5. Effectivity. — This Act shall take effect fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

Approved: 12 February 2015.

4 thoughts on “New Law Increasing the Exemption for 13th Month Pay and Other Benefits (Republic Act 10653)

  1. Susan

    Does RA 10653 have a retroactive effect? Since it is now over 15 days after the publication in the OG has it taken effect?

    Reply
  2. Oscar

    i would like to know if okay to file a complaint againt my current employer since my 13th month pay is incomplete. Meaning, they deducted WTAX to my prorated computation of the 13th month. BTW, my salary is below the ceiling. Thanks.

    Reply
  3. Ma. Regina

    i would like to ask if the hazard pay received by public health workers taxable? or considered to be one of the items for inclusion in the 82,000 ceiling?

    Reply

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