TAXATION:

A QUICK
REVIEW &
EXERCISES
GROUP 1
 TAXATION
 process by which the government collects revenue in
order to pay for its expenses
 Classification of Taxpayers

Individuals Corporation
a Partnership
 INCOME TAX
OF
INDIVIDUALS
INDIVIDUAL INCOME TAXPAYERS

Pure Compensation Earner

Business Income Earner

Mixed Income Earner

 FORMAT OF
COMPUTATION
TOTAL COMPENSATION
INCOME
Basic Pay
 TOTAL INCOME
Total Compensation Income + Other
Earnings
 TAXABLE INCOME
Total Income – Mandatory
Contributions – Non-taxable Benefits
 MANDATORY
CONTRIBUTIONS
SSS, PhilHealth, Pag-Ibig, etc.
 OTHER BENEFITS
below the ceiling (90,000) = actual
above the ceiling (90,000) = 90,000
LET’S TRY!
1. Ms. Lana, an employee of Ayala Corp, has the following items
relating to her compensation during the taxable year, 2022. She is
not a minimum wage earner.

Basic Salary = 450,000

Commissions = 30,000
Mandatory Contributions = 25,000
13th Month Pay = 37,500
Other Benefits = 20,000
De Minimis Benefits = 36,000
2. Mr. Yorick, an employee of Cebu Pacific Corp, has the following items
relating to his compensation during the taxable year, 2022. He is not a
minimum wage earner.

Basic Salary = 600,000

Commissions = 50,000
Overtime Pay = 25,000
Mandatory Contributions = 30,000
13th Month Pay = 50,000
14th Month Pay = 50,000
Other Benefits = 30,000
De Minimis Benefits = 80,000
3. Ms. Ysabel, an employee of Megaworld INC, has the following
items relating to her compensation during the taxable year, 2022.
She is not a minimum wage earner.

Basic Salary = 32,000 monthly

Overtime Pay = 20,000
Mandatory Contributions = 20,000
13th Month Pay = 32,000
Other Benefits = 15,000
De Minimis Benefits = 24,000