BIR Form 1700 Filing for Employees With Two Employers

I. Introduction

In the Philippine tax system, employees generally pay income tax through the withholding tax mechanism. Employers are required to withhold tax from compensation income and remit the same to the Bureau of Internal Revenue. For many employees who earn income from only one employer during the taxable year, the annual income tax obligation is often completed through substituted filing.

However, substituted filing is not always available. One important situation where an employee must personally file an annual income tax return is when the employee had two or more employers during the same taxable year, whether the employers were simultaneous or successive.

In such cases, the employee is commonly required to file BIR Form 1700, the Annual Income Tax Return for individuals earning purely compensation income.

This article discusses the legal and practical framework for BIR Form 1700 filing by employees with two employers in the Philippines.

II. What Is BIR Form 1700?

BIR Form 1700 is the Annual Income Tax Return used by individuals who earn purely compensation income.

It applies to taxpayers who received salary, wages, allowances, bonuses, and other forms of compensation from employment, but who did not earn income from business, practice of profession, or other self-employment activities during the taxable year.

It is distinct from:

BIR Form 1701, which is generally used by self-employed individuals, professionals, mixed-income earners, estates, and trusts.

BIR Form 1701A, which is generally used by certain individuals earning purely business or professional income subject to graduated income tax rates or the 8% income tax option, depending on eligibility.

An employee with two employers but no business or professional income ordinarily uses Form 1700, not Form 1701.

III. Who Must File BIR Form 1700?

An individual earning purely compensation income must file BIR Form 1700 when the person is not qualified for substituted filing.

Employees with two employers during the taxable year are generally required to file Form 1700 because their annual tax liability cannot be completely settled by a single employer through substituted filing.

This includes employees who had:

  1. Two employers at the same time, such as a full-time job and a part-time employment arrangement;
  2. Successive employers, such as resigning from one company and joining another in the same calendar year;
  3. Multiple employers within the year, even if employment with each employer did not overlap; or
  4. A previous employer and a current employer, both of whom issued BIR Form 2316 for the same taxable year.

The key point is that the employee received compensation income from more than one employer during the taxable year.

IV. Legal Basis: Compensation Income and Withholding Tax

Under Philippine tax law, compensation income is taxable unless specifically excluded or exempt. Employers act as withholding agents and deduct withholding tax from employees’ compensation.

The withholding tax system is designed to collect income tax periodically during the year. However, withholding is not always equal to the employee’s final annual tax due. This is especially true where the employee has multiple employers.

Each employer generally computes withholding tax based only on the compensation it pays. An employer may not have full visibility over the employee’s total taxable compensation from other employers. As a result, the combined annual tax due may be higher or lower than the total taxes withheld by all employers.

BIR Form 1700 reconciles the employee’s total annual compensation income, total taxes withheld, and final income tax payable or refundable.

V. Substituted Filing: General Rule and Limitation

A. What Is Substituted Filing?

Substituted filing is a system where the employer’s annual information return and the employee’s BIR Form 2316 are treated as the employee’s income tax return.

In simple terms, an employee who qualifies for substituted filing does not need to personally file BIR Form 1700.

B. Who Usually Qualifies?

An employee generally qualifies for substituted filing when:

  1. The employee received purely compensation income;
  2. The employee worked for only one employer in the Philippines during the taxable year;
  3. The tax due equals the tax withheld by the employer;
  4. The employer properly withheld tax; and
  5. The employer issued BIR Form 2316 and filed the required employer returns.

C. Why Employees With Two Employers Usually Do Not Qualify

An employee with two employers does not usually qualify because the employee did not have only one employer during the taxable year.

Even if both employers properly withheld tax, the employee must consolidate all compensation income and tax withheld in one annual return. That consolidation is done through BIR Form 1700.

VI. Two Employers: Simultaneous vs. Successive Employment

The term “two employers” covers both simultaneous and successive employment.

A. Simultaneous Employment

This occurs when an employee works for two employers at the same time.

Example:

An employee works for Company A from January to December and also works part-time for Company B from July to December.

Both Company A and Company B may withhold taxes on the compensation they paid. However, neither employer may correctly compute the employee’s total annual tax because each employer sees only part of the employee’s income.

The employee must file Form 1700 and report compensation from both employers.

B. Successive Employment

This occurs when an employee changes jobs during the taxable year.

Example:

An employee works for Company A from January to March, resigns, and works for Company B from April to December.

Even though the employee had only one employer at a time, the employee had more than one employer during the taxable year. The employee is generally required to file BIR Form 1700.

C. Common Misconception

Many employees believe that they need not file because each employer issued Form 2316. This is incorrect in multiple-employer cases. The existence of Form 2316 does not automatically mean the employee qualifies for substituted filing.

Form 2316 is a certificate of compensation payment and tax withheld. It may serve as a substituted return only when the legal conditions for substituted filing are satisfied.

VII. BIR Form 2316 and Its Importance

BIR Form 2316, Certificate of Compensation Payment/Tax Withheld, is essential for preparing Form 1700.

Each employer must issue Form 2316 to the employee, usually showing:

  1. Gross compensation income;
  2. Non-taxable and exempt compensation;
  3. Taxable compensation income;
  4. Statutory contributions and other deductions;
  5. Taxes withheld; and
  6. Employer and employee identification details.

An employee with two employers should obtain a Form 2316 from each employer that paid compensation during the taxable year.

The figures in all Forms 2316 must be consolidated in Form 1700.

VIII. What Income Is Reported in BIR Form 1700?

Form 1700 reports compensation income, including taxable salary and other taxable employee benefits.

Common items include:

  1. Basic salary;
  2. Overtime pay;
  3. Holiday pay;
  4. Night shift differential;
  5. Taxable allowances;
  6. Taxable bonuses;
  7. Taxable 13th month pay and other benefits exceeding the statutory exclusion threshold;
  8. Commissions paid as compensation;
  9. Directors’ fees treated as compensation, where applicable;
  10. Taxable fringe benefits or employee benefits, depending on classification; and
  11. Other compensation-related payments.

Certain items may be excluded or treated as non-taxable, such as mandatory employee contributions and exempt portions of 13th month pay and other benefits, subject to applicable limits and rules.

IX. Taxable vs. Non-Taxable Compensation

Not all amounts received from employment are taxable.

A. Common Non-Taxable or Exempt Items

These may include:

  1. Mandatory SSS, GSIS, PhilHealth, and Pag-IBIG employee contributions;
  2. De minimis benefits within statutory or regulatory limits;
  3. 13th month pay and other benefits up to the applicable exclusion threshold;
  4. Certain retirement benefits that satisfy legal requirements;
  5. Certain separation benefits due to causes beyond the employee’s control; and
  6. Other exclusions under the Tax Code and revenue regulations.

B. Taxable Items

Amounts not excluded by law or regulation are generally taxable. Allowances, reimbursements, bonuses, incentives, and benefits may be taxable depending on their nature, documentation, and treatment under tax rules.

X. How the Tax Is Computed

For employees using Form 1700, the basic process is:

  1. Add all taxable compensation income from all employers;
  2. Determine the total taxable compensation for the year;
  3. Apply the graduated income tax rates applicable to individuals;
  4. Determine the annual income tax due;
  5. Deduct total taxes withheld by all employers;
  6. Pay the balance, if any; or
  7. Reflect any overpayment, if applicable.

The tax return therefore reconciles total annual income and total withholding tax.

XI. Why Additional Tax May Be Payable

Employees with two employers are often surprised to find that they still owe tax even though taxes were withheld by both employers.

This commonly happens because Philippine individual income tax uses graduated rates. When two employers compute withholding separately, each employer may treat the employee’s compensation as lower than the employee’s actual combined annual income.

Example:

Company A withholds tax based on salary paid by Company A only. Company B withholds tax based on salary paid by Company B only. But the employee’s final tax is based on Company A income plus Company B income.

The combined income may fall into a higher tax bracket, resulting in additional tax due.

XII. Why an Overpayment May Occur

An overpayment may also occur.

This may happen when:

  1. One or both employers over-withheld tax;
  2. The employee’s annualized income was estimated higher than actual income;
  3. Employment ended earlier than expected;
  4. Payroll adjustments were not properly synchronized; or
  5. The employee had deductible or exempt amounts not correctly considered.

An overpayment may generally be carried over, refunded, or otherwise treated in accordance with the options and rules indicated in the return and applicable tax regulations. In practice, refunds for individual employees may require documentation and may involve administrative processing.

XIII. Filing Deadline

BIR Form 1700 is generally filed on or before April 15 following the close of the taxable year.

For example, income earned during calendar year 2025 is generally reported on or before April 15, 2026.

If the deadline falls on a weekend, holiday, or non-working day, the applicable BIR rules on deadline movement should be checked.

XIV. Where to File

The place and method of filing depend on the taxpayer’s classification and applicable BIR rules.

Employees may file through:

  1. BIR electronic filing systems, where applicable;
  2. Authorized Agent Banks;
  3. Revenue Collection Officers;
  4. Authorized tax software providers or electronic channels, where available; or
  5. Other BIR-prescribed filing and payment channels.

Many employees file electronically, especially where required or convenient. The employee should ensure that both the return and payment, if any, are properly completed.

XV. Documents Needed

An employee with two employers should prepare:

  1. BIR Form 1700;
  2. BIR Form 2316 from Employer 1;
  3. BIR Form 2316 from Employer 2;
  4. Proof of tax withheld;
  5. Proof of payment, if tax is payable;
  6. Taxpayer Identification Number;
  7. Personal information and civil status details;
  8. Details of qualified dependents, if relevant under applicable rules; and
  9. Other documents supporting exclusions, deductions, or tax credits.

The most important supporting documents are the Forms 2316 from all employers.

XVI. Step-by-Step Filing Process

Step 1: Secure BIR Form 2316 From Each Employer

The employee should obtain a Form 2316 from every employer that paid compensation during the year.

For successive employment, the previous employer should issue Form 2316 upon separation or within the applicable period. The current employer also issues Form 2316 after year-end or within the required period.

Step 2: Review the Forms 2316

The employee should check:

  1. Correct name;
  2. Correct TIN;
  3. Correct employer details;
  4. Correct taxable compensation;
  5. Correct non-taxable compensation;
  6. Correct tax withheld; and
  7. Correct taxable year.

Errors should be corrected before filing.

Step 3: Consolidate Compensation Income

Add the taxable compensation income from all Forms 2316.

Do not merely report the income from the current employer. Form 1700 should reflect the total compensation income for the year.

Step 4: Consolidate Tax Withheld

Add the withholding taxes from all Forms 2316.

These amounts are claimed as tax credits against the annual income tax due.

Step 5: Compute the Annual Tax Due

Apply the applicable graduated income tax rates to the total taxable compensation income.

Step 6: Determine Tax Payable or Overpayment

Subtract total taxes withheld from total annual tax due.

If tax due exceeds tax withheld, the employee must pay the balance.

If tax withheld exceeds tax due, there is an overpayment.

Step 7: File the Return

File Form 1700 through the appropriate channel.

Step 8: Pay Any Tax Due

If the return shows tax payable, payment must be made on or before the filing deadline through authorized channels.

Step 9: Keep Records

The employee should keep copies of:

  1. Filed Form 1700;
  2. Forms 2316;
  3. Payment confirmation;
  4. Electronic filing confirmation, if any; and
  5. Supporting documents.

XVII. Example: Successive Employers

Facts

Employee worked for Company A from January to June. Employee worked for Company B from July to December. Both companies issued Form 2316. Employee had no business or professional income.

Tax Treatment

The employee earned purely compensation income but had two employers during the taxable year.

The employee generally does not qualify for substituted filing.

The employee must file BIR Form 1700, reporting compensation from both Company A and Company B.

Taxes withheld by both companies are credited against the final annual tax due.

XVIII. Example: Simultaneous Employers

Facts

Employee worked for Company A full-time for the entire year. Employee also worked for Company B part-time from March to December. Both companies withheld tax.

Tax Treatment

The employee had purely compensation income from two employers.

The employee must file BIR Form 1700.

The employee must combine the taxable compensation from both employers.

The withholding taxes from both employers are credited against the final tax due.

XIX. Employees Who Also Have Business or Professional Income

BIR Form 1700 is for individuals earning purely compensation income.

If an employee also earns income from business, freelancing, consulting, practice of profession, or self-employment, the employee is no longer a purely compensation income earner.

In that case, the proper annual return is generally not Form 1700. The taxpayer may need to file the applicable Form 1701 or other relevant income tax return, depending on the nature of income and tax classification.

Examples of mixed-income situations include:

  1. Employee with a full-time job and freelance income;
  2. Employee with salary and online business income;
  3. Employee with salary and professional fees;
  4. Employee with salary and commissions not treated as compensation; and
  5. Employee with salary and rental income requiring separate tax reporting.

XX. Special Issue: Employer Treats Employee as Qualified for Substituted Filing

Sometimes, the current employer marks the employee as qualified for substituted filing even though the employee had a previous employer during the same year.

This may happen when the employee fails to submit the previous Form 2316 to the current employer, or when payroll information is incomplete.

The employee should not rely solely on the employer’s marking if the employee knows that there were multiple employers during the year.

The legal duty to file may still apply.

XXI. Special Issue: Failure to Submit Previous Form 2316 to Current Employer

When an employee transfers to a new employer, the new employer may ask for the previous employer’s Form 2316.

This helps the new employer annualize compensation and compute withholding tax more accurately.

Failure to provide the previous Form 2316 can result in inaccurate withholding. Even if the current employer withholds tax based on available information, the employee may still have to file Form 1700 and pay any deficiency.

XXII. Special Issue: No Tax Due After Consolidation

Even if no additional tax is due, the employee may still be required to file Form 1700 if the employee had more than one employer and does not qualify for substituted filing.

Filing obligation and payment obligation are related but distinct.

A taxpayer may have to file even if the final result is zero tax payable.

XXIII. Special Issue: Minimum Wage Earners

Minimum wage earners may have special tax treatment, particularly with respect to statutory minimum wage, holiday pay, overtime pay, night shift differential, and hazard pay, subject to applicable rules.

However, if a minimum wage earner has multiple employers or receives taxable compensation beyond exempt items, filing requirements should be carefully reviewed.

The label “minimum wage earner” does not automatically eliminate all filing obligations in every multiple-employer situation.

XXIV. Special Issue: Foreign Employees and Resident Aliens

Foreign employees working in the Philippines may also be subject to Philippine income tax rules, depending on residence status, source of income, and applicable tax treaties or special regimes.

A resident alien or non-resident alien engaged in trade or business in the Philippines earning compensation income from Philippine employers may have filing obligations similar to other compensation income earners, subject to specific rules.

Foreign nationals should also consider immigration, treaty, and employer withholding implications.

XXV. Special Issue: Regional Operating Headquarters, Special Employers, and Preferential Regimes

Certain employees may historically have been covered by special tax regimes or preferential tax treatment depending on employer type, position, nationality, and applicable law.

Because special regimes have changed significantly over time, employees in multinational companies, regional headquarters, offshore-related entities, or special economic zones should verify their current tax treatment.

If the employee receives purely compensation income from two employers, the multiple-employer filing issue may still arise, but the computation may depend on the applicable tax regime.

XXVI. Penalties for Failure to File or Pay

Failure to file BIR Form 1700 when required may expose the taxpayer to penalties.

Common consequences may include:

  1. Surcharge;
  2. Interest;
  3. Compromise penalties;
  4. Assessment for deficiency income tax;
  5. Administrative inconvenience; and
  6. Difficulty securing tax clearance or resolving future BIR inquiries.

If tax was underpaid because the income from two employers was not consolidated, the BIR may assess deficiency tax plus penalties.

XXVII. Amended Return

If an employee filed an incorrect return, the employee may need to file an amended return, subject to applicable rules.

Common reasons for amendment include:

  1. Missing one employer’s Form 2316;
  2. Incorrect taxable compensation;
  3. Incorrect tax withheld;
  4. Incorrect TIN or taxpayer details;
  5. Incorrect computation; or
  6. Discovery of additional compensation income.

An amended return should be filed before the BIR discovers or audits the deficiency, where applicable, to reduce risk of enforcement consequences.

XXVIII. Recordkeeping

Employees should keep tax records even if they are not business taxpayers.

Recommended records include:

  1. All Forms 2316;
  2. Filed Form 1700;
  3. Proof of filing;
  4. Proof of payment;
  5. Employment contracts;
  6. Final pay documents;
  7. Payroll summaries;
  8. Separation documents; and
  9. Correspondence with employers regarding tax withholding.

A prudent retention period is at least the period during which the BIR may examine or assess the return, subject to applicable statute-of-limitations rules.

XXIX. Practical Checklist for Employees With Two Employers

Before April 15, the employee should confirm:

  1. Did I have more than one employer during the taxable year?
  2. Did I receive Form 2316 from each employer?
  3. Did I earn only compensation income?
  4. Did I have any freelance, business, or professional income?
  5. Did I combine all taxable compensation?
  6. Did I include all taxes withheld?
  7. Is my TIN correct?
  8. Is my civil status correctly indicated?
  9. Is there additional tax payable?
  10. Have I filed and paid on time?

If the answer to the first question is yes and the employee earned purely compensation income, Form 1700 is generally the relevant annual return.

XXX. Common Mistakes

1. Filing Nothing Because Both Employers Withheld Tax

Withholding does not automatically replace annual filing in multiple-employer cases.

2. Reporting Only the Current Employer

The return must include all compensation income for the taxable year.

3. Forgetting the Previous Employer’s Form 2316

The previous employer’s Form 2316 is necessary for accurate reporting.

4. Using the Wrong Return

Pure compensation income generally uses Form 1700. Mixed-income earners generally use a different return.

5. Assuming No Tax Payable Means No Filing

A filing obligation may exist even when the final tax payable is zero.

6. Ignoring Overwithholding

If too much tax was withheld, the employee should properly reflect the overpayment in the return.

7. Filing Late

Late filing may result in penalties even if the tax due is small.

XXXI. Employer Obligations

Employers have their own withholding and reporting obligations.

These generally include:

  1. Withholding tax on compensation;
  2. Remitting withheld taxes to the BIR;
  3. Issuing Form 2316 to employees;
  4. Filing annual information returns;
  5. Keeping payroll records; and
  6. Making year-end adjustments where appropriate.

However, the employer’s compliance does not automatically eliminate the employee’s obligation to file when the employee is disqualified from substituted filing.

XXXII. Employee Obligations

An employee with two employers should:

  1. Disclose prior employment information to the current employer when required;
  2. Secure Form 2316 from all employers;
  3. File Form 1700 when not qualified for substituted filing;
  4. Pay any deficiency tax;
  5. Keep records; and
  6. Correct mistakes through amendment or voluntary compliance where appropriate.

XXXIII. Legal Character of Form 2316 in Multiple-Employer Cases

Form 2316 is not always the employee’s final income tax return.

In a single-employer substituted filing case, Form 2316 may effectively serve as the employee’s substituted annual return.

In a multiple-employer case, Form 2316 is better understood as supporting evidence. It certifies income paid and tax withheld by each employer. The employee then uses those certificates to complete Form 1700.

Thus, in a two-employer case, the legal function of Form 2316 is evidentiary and computational, not necessarily substitutive.

XXXIV. Consequences of Incorrect Withholding by Employers

If an employer under-withheld tax, the employee may still have an annual tax payable when filing Form 1700.

The BIR may also separately pursue the employer for withholding tax violations, depending on the facts.

From the employee’s perspective, the annual return is the mechanism to settle the correct tax due.

XXXV. When the Employee Has No Form 2316

If an employer fails or refuses to issue Form 2316, the employee should request it formally.

The employee may also gather alternative payroll records, such as payslips and final pay computations. However, Form 2316 remains the standard document for compensation and withholding.

Failure of an employer to issue Form 2316 may itself be a compliance issue, but it does not necessarily remove the employee’s filing obligation.

XXXVI. Tax Planning Considerations

Employees with multiple employers should anticipate possible additional tax.

Useful practices include:

  1. Informing the second employer of prior compensation, where appropriate;
  2. Providing the previous Form 2316 to the current employer;
  3. Estimating annual taxable income before year-end;
  4. Setting aside funds for possible additional tax;
  5. Reviewing final pay and year-end adjustments; and
  6. Filing early enough to correct errors before the deadline.

Multiple employment may increase withholding errors, so employees should not wait until the filing deadline to reconcile income.

XXXVII. Frequently Asked Questions

1. I changed jobs during the year. Do I need to file BIR Form 1700?

Generally, yes, if you earned purely compensation income and had more than one employer during the taxable year. Successive employers count as multiple employers for this purpose.

2. I had two employers, but both withheld tax. Do I still need to file?

Generally, yes. The issue is not merely whether tax was withheld, but whether you qualify for substituted filing. Multiple-employer employees generally do not.

3. I had one employer in January and another from February to December. Is that still two employers?

Yes. Even if the employment did not overlap, you had two employers during the taxable year.

4. Which form should I use?

If you earned purely compensation income, the usual annual return is BIR Form 1700.

5. What if I also freelanced?

You may be a mixed-income earner and may need a different annual income tax return, generally not Form 1700.

6. What if my previous employer did not give me Form 2316?

You should request it. You may need payroll records to reconstruct the figures, but Form 2316 is the proper certificate.

7. What if the final computation shows no tax payable?

You may still need to file if you are not qualified for substituted filing.

8. Can my current employer file for me?

The employer handles withholding and employer returns. But if you are disqualified from substituted filing, you are generally responsible for filing your own annual return.

9. Is Form 2316 enough?

Not in the usual two-employer case. Form 2316 supports Form 1700 but usually does not replace it when there are multiple employers.

10. What happens if I fail to file?

You may be subject to penalties, interest, surcharge, compromise penalties, and deficiency tax assessment.

XXXVIII. Conclusion

An employee with two employers in the Philippines must pay close attention to annual income tax filing obligations. The central rule is that substituted filing is generally available only to qualified employees with purely compensation income from a single employer during the taxable year. Once an employee has two employers, whether simultaneous or successive, substituted filing usually ceases to apply.

For employees who earned purely compensation income from two employers, BIR Form 1700 is the ordinary mechanism for consolidating income, crediting taxes withheld, and determining the final annual tax due or overpayment.

The most important documents are the Forms 2316 issued by each employer. These must be reviewed, consolidated, and used to prepare the annual return. Filing should generally be completed on or before April 15 following the taxable year.

Failure to file because “tax was already withheld” is one of the most common and costly mistakes. Withholding is not always final. In multiple-employer cases, the employee remains responsible for ensuring that the annual tax return correctly reflects total compensation income and total taxes withheld.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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