Binay: Tax exemption of overtime pay, bonuses to boost workers’ financial security 

Senatorial candidate and Makati City Mayor Abby Binay on stage in one of her recent sorties

Senatorial candidate and Makati Mayor Abby Binay has renewed her commitment to push for the tax exemption of overtime pay and bonuses to promote the financial security of workers and their families.

Binay said she would actively pursue the amendment of the tax code in the Senate to reclassify overtime pay and bonuses as “non-taxable income” to help workers cope with rising inflation and the cost of living.

“Exempting minimum wage earners from income tax is not enough. Moreover, the current non-taxable income rates are no longer realistic given the present economic conditions in the country,” Binay said.

The Tax Reform for Acceleration and Inclusion (TRAIN) Law, or Republic Act No. 10963, has set the threshold for non-taxable income at P20,833 per month or P250,000 per year.

The law also excludes the 13th month pay and other bonuses up to P90,000 from the taxable income, and any excess is included in the computation of taxable income for the applicable tax year.

“Workers deserve to enjoy their overtime pay and bonuses in full. It is but fair to fully compensate their hard work and extended hours of working, which cut into their supposed rest period and family time,”  Binay said.

The senatorial aspirant said that excluding overtime pay from the computation of taxable income will increase the take-home pay of workers.

“If they receive their OT pay in full, they will have more disposable income to spend for the basic needs of their families like food, clothing, shelter, water, and electricity. They will also be able to cover other day-to-day expenses of family members like transportation in going to and from work and school,” Binay said.

Additionally, making the 13th month pay and other bonuses tax-exempt will enable Filipino families to fully experience the joys of Christmas and welcome the New Year with hope and cheer, the mayor said.

“Mas magiging masaya ang Pasko para sa bawat pamilyang Pilipino kapag buong-buong natatanggap ang mga yearend bonus. Malamang ay makakabayad din sila kahit papaano sa mga utang, at magiging mas masaya ang pagsalubong nila sa Bagong Taon,” Binay said.

She said that the bigger takehome pay and bonuses will stimulate consumer spending and translate to brisk business sales and higher revenue collection for the government.

“The government’s lost revenue from taxes can still be recovered because the people’s purchasing power will increase,” Binay said in Filipino.

She also said that the government can continue to expand its revenue base by intensifying efforts to strengthen the tourism industry, capitalizing on the country’s natural wonders and the warm hospitality of its people.

“We have so many resources yet to be fully tapped for revenue generation. Let us focus on them so that over 50 million Filipino workers, including minimum wage earners and ordinary employees, will not have to bear onerous taxes and be able to provide a decent life for their families,” Binay said.