The 13th Month Pay

Is 13th month pay tax deductable?

This dilemma came to me when i saw my payslip online. My 13th month pay was taxed... twice. Once I exceeded when the non-taxable 30k limit, second as taxable income. I searched BIR for some clarity.

First and foremost, i didn't see anything about the 30k guideline. Second, i found a list of exceptions for Gross Taxable Income, and here it is.

From http://www.bir.gov.ph/taxinfo/tax_income.htm
5) What are some of the exclusions from gross income?

• Life insurance
• Amount received by insured as return of premium
• Gifts, bequests and devises
• Compensation for injuries or sickness
• Income exempt under treaty
• Retirement benefits, pensions, gratuities, etc.
• Miscellaneous items
• income derived by foreign government
• income derived by the government or its political subdivision
• prizes and awards in sport competition
• prizes and awards which met the conditions set in the Tax Code
• 13th month pay and other benefits
• GSIS, SSS, Medicare and other contributions
• gain from the sale of bonds, debentures or other certificate of indebtedness
• gain from redemption of shares in mutual fund

So why was my 13th month pay taxed? And again, what's with the 30ku limit? I'll be computing my tax using the Philippines Tax Guidelines. Maybe the 30ku rule was an Intel self-imposed rule. I already sent an email to BIR and ask advice about 13th month pay, mid-year bonus, and other employee bonuses based on a company's profitability or ROI (revenue/profit sharing). I hope to get a response by Tuesday. By then, I'll see if I'll go and talk to the employee services at Intel or file a class action suit against Intel (remember, i want to rule the world, so why not start on conquering the largest microprocessor company... wahahahaha).

Anyway, IF the 13th month pay is really taxable, then i just hope that i see where my money goes, how it can be used to improve our country and not to be used as botox treatment pay for the corrupt officials.