BIR Form 1601-C: The 10th of Every Month

BIR Form 1601-C is the Monthly Remittance Return of Income Taxes Withheld on Compensation. If you run payroll, this is the return that moves your employees’ withheld tax to the government, and the date to remember is the 10th.

The deadline

BIR publishes two schedules, and which one applies depends on whether you file manually or through eFPS.

The eFPS staggering runs by taxpayer group, and the spread is only 4 days wide.

Both schedules apply to large and non-large taxpayers alike. Size does not move the date; the filing channel does.

Across a full 12 months of payroll, a manual filer has 10 days after the close of each of the first 11 months, and then a longer run to January 15 for December. An eFPS filer never has fewer than 11 days and never more than 15 days. December is the only month whose deadline is not counted in days from the month’s close, which is why it is the one most often missed.

Why monthly, when the law says quarterly

This trips up people reading the Code directly. Section 81 of the NIRC, as amended by the Ease of Paying Taxes Act, Republic Act No. 11976, says:

The return shall be filed and the payment made, either electronically or manually, within twenty-five (25) days from the close of each calendar quarter: Provided, however, That the Commissioner may, with the approval of the Secretary of Finance, require the employee to pay or deposit the taxes deducted and withheld at more frequent intervals.

The monthly 1601-C is the exercise of that power. RA 11976 also opened the filing channel: payment may now be made either electronically or manually to any authorised agent bank, a Revenue District Office through a Revenue Collection Officer, or an authorised tax software provider.

Which law says what

Three statutes are in play, and mixing them up is how outdated payroll advice survives.

RA 11976 took effect 15 days after publication, gave the Secretary of Finance 90 days from effectivity to promulgate the implementing regulations, and gave taxpayers 6 months from those regulations to comply with the VAT and percentage tax amendments. Those transition periods do not touch Section 81, which changed on the Act’s own effectivity.

Who files, and who does not

BIR’s description is short: the return is filed in triplicate by every withholding agent or payor required to deduct and withhold taxes on compensation paid to employees.

The withholding duty itself comes from Section 79(A), and it carries a floor:

No withholding of a tax shall be required where the total compensation income of an individual does not exceed the statutory minimum wage, or ₱5,000.00 per month, whichever is higher.

The minimum wage guide carries the regional rates that first limb is measured against, and they are all well above ₱5,000.00 a month, so in practice the minimum wage is the operative figure.

What counts as wages

Section 78 defines the term, and the exclusions are narrow.

There is also a rule for mixed payroll periods that decides the whole period one way or the other. Where remuneration for services performed during one-half or more of a payroll period of not more than 31 consecutive days constitutes wages, all the remuneration for that period is deemed wages. Where more than half of it does not constitute wages, none of it is.

Domestic service being outside the definition is why the kasambahay law guide sits on a different footing from ordinary payroll.

The year-end adjustment

This is the part employees feel in their December pay.

Before the last payroll period of the calendar year, the employer determines the tax due from each employee on taxable compensation for the entire year under Section 24(A). The difference between that and the sum of taxes withheld from January to November is either withheld from the December salary, or refunded to the employee not later than January 25 of the succeeding year.

That is 11 months of withholding set against a liability computed over 12 months, with the whole gap closed in a single pay period. A December payslip that looks wrong usually is not.

The income tax table carries the graduated rates that computation runs on.

What TRAIN removed

Worth stating because outdated payroll guidance still repeats it. TRAIN, Republic Act No. 10963, amended Section 79 and relettered its subsections. Two went away entirely:

What survived, renumbered: refunds and credits, withholding on the basis of average wages, nonresident aliens, and the year-end adjustment.

Liability, refunds and interest

The trust characterisation is the one to note: withheld tax is not the employer’s working capital at any point.

Section 79 also lets the Commissioner authorise employers to withhold on the basis of average wages: estimating what an employee will be paid in a quarter of the calendar year, and withholding on each payment as if the average of the estimate were the actual wage. Where the employer is the Government or any political subdivision, agency or instrumentality, Section 82 puts the return on the officer or employee having control of the payment of the wage.

The quarterly returns beside it

Compensation is the outlier. The withholding returns either side of 1601-C are quarterly, and BIR sets them on a different clock.

So an employer paying both salaries and professional fees is on two schedules at once: 12 compensation returns a year against 4 expanded ones.

The annual returns that close the year

Section 83 is the statutory basis for both: the written statement to each employee by January 31, and the annual information return with the list of employees, their total compensation and total taxes withheld, by the same date.

The BIR Form 2316 guide covers the employee side, and the substituted filing rules in the ITR guide cover when that certificate takes the place of an employee’s own return.

What this page does not cover

The withholding tax tables themselves, the revenue regulations that set them, the line-by-line instructions on the form, the alphalist format required with Form 1604-C, and the penalty amounts for late remittance are not published in the sections cited here, so none is stated. RR No. 26-2002 is named by BIR for the eFPS grouping but the group assignment for a given taxpayer comes from BIR, not from this page.

Related

The BIR Form 2316 guide covers the annual certificate built from these monthly remittances, the BIR Form 2307 guide covers the expanded withholding equivalent for payments other than compensation, and the eBIRForms guide covers the filing channel itself.

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