How to File BIR Form 1601-C: Withholding Tax Remittance Employer Walkthrough in Philippines 🇵🇭

Every employer in the Philippines is required to withhold income tax from employee salaries each month and remit it to the Bureau of Internal Revenue (BIR) using Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). Missing this deadline or remitting the wrong amount are two of the most common compliance failures for international operators employing Philippine-based staff.

This walkthrough covers the full process: who must file, how to compute the withholding amount, how to submit via eBIRForms or eFPS, and how to avoid the penalties that compound quickly when filings slip.

Who Must File Form 1601-C

All employers who pay compensation income to employees are required to file Form 1601-C, including domestic corporations and partnerships, foreign corporations operating in the Philippines, individual employers with one or more employees, and government agencies (using separate channels).

The obligation begins with the first payroll run and continues every month regardless of whether any tax was actually withheld. A nil return must be filed in months where no taxable compensation was paid.

What Form 1601-C Covers

Form 1601-C covers withholding tax on compensation (WTC) — the income tax withheld from employee salaries, wages, allowances, bonuses, and other forms of compensation. It does not cover expanded withholding tax on non-employee payments (Form 1601-EQ), final withholding tax (Form 1601-FQ), or SSS, PhilHealth, and Pag-IBIG contributions (filed separately via their respective portals).

Step 1: Compute Each Employee's Monthly Withholding

Taxable compensation = Gross compensation less mandatory deductions (SSS, PhilHealth, Pag-IBIG employee contributions).

2026 withholding tax table (monthly, TRAIN Law Schedule 2)

Monthly taxable compensation	Withholding tax
Up to PHP 20,833	0%
PHP 20,834 to 33,332	20% of excess over PHP 20,833
PHP 33,333 to 66,666	PHP 2,500 + 25% of excess over PHP 33,333
PHP 66,667 to 166,666	PHP 10,833 + 30% of excess over PHP 66,667
PHP 166,667 to 666,666	PHP 40,833 + 32% of excess over PHP 166,667
Over PHP 666,666	PHP 200,833 + 35% of excess over PHP 666,666

Rates are under TRAIN Law Schedule 2, in force since January 2023. Verify no further amendment has been enacted.

Sum the withholding amounts for all employees. This total is what gets reported and remitted on Form 1601-C.

Step 2: Determine Your Filing Deadline

System	Deadline
eBIRForms (non-eFPS)	10th of the following month
eFPS (large taxpayers and enrolled filers)	Staggered by industry group — generally 11th to 15th of the following month

For December (filed in January), the deadline is 15 January for eFPS filers and 10 January for eBIRForms filers.

Step 3: Prepare Form 1601-C

Via eBIRForms (most common for non-large taxpayers)

1. Download and open the eBIRForms offline package from the BIR website (current version at time of filing).
2. Select Form 1601-C from the form list.
3. Enter your TIN, registered business name, address, and the applicable return period.
4. Fill in the total number of employees, total compensation paid, and total tax withheld.
5. Validate the form — the system flags any missing fields.
6. Submit via the eBIRForms system. You will receive an email confirmation with a Filing Reference Number (FRN).

Via eFPS (Electronic Filing and Payment System)

1. Log in to the eFPS portal at efps.bir.gov.ph.
2. Select Form 1601-C under the e-Filing module.
3. Complete the return fields and submit. The system generates a confirmation number.
4. Proceed immediately to payment via the eFPS e-Payment module.

Step 4: Pay the Tax Due

eBIRForms payment options

• GCash / Maya via the BIR payment option using the FRN
• Land Bank, DBP, or UnionBank online via their BIR tax payment portals
• Over-the-counter at Authorized Agent Banks (AABs)
• Revenue Collection Officers for areas without AABs

eFPS payment

Payment is made directly within eFPS after filing. Select your enrolled bank, enter the amount due, and authorise the debit. The system confirms payment and generates a Transaction Reference Number (TRN).

Step 5: Retain Records

Retain the following for at least ten years:

• Filed Form 1601-C with FRN or eFPS confirmation number
• Proof of payment (bank confirmation, GCash receipt, or AAB stamp)
• Monthly payroll register showing per-employee gross compensation, deductions, and withholding amounts
• Employee Alpha List (BIR Form 1604-C Annex A) — maintained monthly, submitted annually

Annual Reconciliation: BIR Form 1604-C

Form 1601-C covers monthly remittances. At year-end, employers must file Form 1604-C (Annual Information Return of Income Taxes Withheld on Compensation), reconciling the 12 monthly 1601-C remittances against the total tax withheld per employee.

Obligation	Deadline
Form 1604-C annual return	31 January of the following year
BIR Form 2316 (tax certificate to employees)	31 January of the following year

Form 2316 must be issued to every employee, including those who resigned during the year.

Penalties for Late or Non-Filing

Violation	Penalty
Late filing	25% surcharge on tax due + 12% interest per annum + PHP 1,000 compromise penalty
Failure to file	50% surcharge + 12% interest per annum
Failure to withhold	Employer liable for unwithheld tax + 25% surcharge + interest
Late Form 2316 issuance	PHP 1,000 per certificate, up to PHP 25,000 per calendar year

Common Mistakes

1. Filing on the 15th regardless of system. The 15th deadline applies only to eFPS filers in specific industry groups. Non-eFPS employers using eBIRForms must file by the 10th. Filing five days late on every monthly return generates 12 annual penalty events.

2. Not deducting SSS, PhilHealth, and Pag-IBIG before applying the tax table. Mandatory contributions must be netted from gross compensation before computing withholding. Applying the tax table to gross pay consistently overwitholds.

3. Omitting de minimis benefits and 13th month pay from the computation. De minimis benefits within BIR thresholds are exempt from withholding. The 13th month pay up to PHP 90,000 per year is also tax-exempt. Including these in the taxable base inflates withholding.

4. Missing the nil return obligation. In months where no compensation was paid, a nil 1601-C must still be filed by the deadline. Failure to file a nil return triggers the same late-filing penalties as a return with tax due.

5. Not reconciling 1601-C remittances to 1604-C at year-end. Monthly remittances and the annual return must match. Discrepancies flag the account for BIR audit.

How Cadana Supports Philippine Payroll Compliance

Computing monthly withholding per employee under the TRAIN Law table, generating Form 1601-C data, and maintaining the per-employee alpha list for annual 1604-C reconciliation — Cadana's global payroll tax engine handles the full BIR withholding compliance cycle at the API layer.

Book a demo at cadanapay.com/book-demo to see how it works in practice.

Sources and References

• Bureau of Internal Revenue — Form 1601-C and eBIRForms download
• BIR — eFPS filing guide
• TRAIN Law (Republic Act 10963) — Revised withholding tax schedule
• BIR Revenue Regulations No. 11-2018 — Updated withholding tax rules
• BIR Revenue Memorandum Circular No. 105-2019 — Substituted filing guidelines

Rates and deadlines current as of April 2026. Verify eBIRForms version and current withholding tax tables via the BIR website before filing.