Mid-year bonuses ‘fatter’ this year

GOVERNMENT workers’ mid-year bonus envelops, particularly those that are P82,000 and below, are fatter this year, said Senator Sonny Angara.

Angara, chairman of the Senate committee on ways and means, announced that the benefit of Republic Act 10653, which he authored and sponsored last year, mandating tax exemption for bonuses not over than P82,000, is applicable to the mid-year bonus scheduled to be given to state employees this month.

RA 10653 provides that the 13th month pay and other benefits, including productivity incentives and Christmas bonuses not exceeding P82,000 being given to both government and private sector employees should be tax-free.

“Make no mistake about it. Even the mid-year bonus is covered by this law. That’s why I’m reminding employees who are receiving the mid-year bonus to carefully check your envelops or your ATMs,” Angara said in a statement.

Before RA 10653 was signed into law in February last year, only bonuses not exceeding P30,000 were exempted from tax.

“We increased the tax exemption cap for the bonus for bigger take-home pay of workers to their families,” said Angara.

The mid-year bonus is equivalent to one month’s basic pay, and will be given on top of the 13th month bonus employees are entitled to every December.

The budget department announced that it has allotted a total of P32 billion—P26 billion for civilian personnel and P6 billion for unformed and military personnel-for the payout this year of mid-year bonus of government employees.

Under Budget Circular 2017-2 issued on May 8, the bonus will cover all civilian, uniformed and military personnel—as long as they have been in government service for at least four months of service since July 2016.