BIR Form 2316: Employer and Employee Duties When Transferring Jobs in the Philippines

This article explains what BIR Form 2316 is, when and how it must be issued, received, and used, and what happens when an employee transfers jobs mid-year. It reflects the Philippine National Internal Revenue Code (NIRC), as amended (including TRAIN/CREATE), Bureau of Internal Revenue (BIR) issuances, and standard payroll practice. It is written for HR, payroll, accountants, and employees navigating a job move.

1) What is BIR Form 2316?

BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) is the employer’s official certificate of an employee’s gross compensation, taxable and non-taxable benefits, and withholding taxes for a calendar year. It serves to:

Evidence taxes withheld (the employee’s credit for income tax purposes).
Support substituted filing (where allowed) in place of the employee’s own annual income tax return (ITR).
Provide year-to-date (YTD) pay and tax figures to a new employer for proper annualization when an employee transfers during the year.

Who gets a 2316? All employees earning compensation income, including minimum wage earners (even if no tax is due), and regardless of employment status (probationary, regular, part-time, resigned, terminated, retired).

2) Legal framework and key concepts

NIRC: Requires withholding on compensation and the filing/issuance of information returns (including certificates of taxes withheld). Key provisions include those on withholding agents’ duties and penalties for non-compliance (e.g., NIRC §§ 57–58, 81–89; penalties in §§ 248, 249, 255).
Substituted filing: A pure compensation earner with a single employer for the entire year and correct withholding generally need not file an annual ITR; the duly signed Form 2316 functions as the return on their behalf. Having two or more employers in the same year (concurrent or successive) usually disqualifies the employee from substituted filing.
Annualization: The employer’s year-end process of recomputing the employee’s annual tax based on full-year taxable compensation, personal/SMW exemptions where applicable, and mandatory contributions, then truing up any under- or over-withholding in December pay.

3) Timelines at a glance

Upon separation: The former employer should prepare and release a signed Form 2316 covering the period of employment up to separation. Best practice is to include the certificate with the final pay or release it promptly after separation, so the worker can furnish it to the next employer without delay.
Year-end issuance: Employers must issue Form 2316 to each employee for the prior calendar year no later than on or about 31 January of the following year. (Maintain internal cut-offs so resignations late in the year still get timely certificates.)
Submission to the BIR: Employers submit copies of duly signed 2316s to the BIR together with/linked to the Alphalist of Employees/Payees on the statutory due dates applicable to the employer’s filing channel (e.g., eFPS or eBIRForms). Keep proof of transmission/receipt.

Practical tip: Align cut-off schedules so that resigning employees receive a “partial-year” 2316 promptly (for hand-over to the new employer) and a “full-year” 2316 at year-end if they remained on your payroll into December.

4) Duties when an employee leaves (former employer)

Compute final compensation and taxes
- Include all taxable pay up to the last day (e.g., basic pay, allowances, OTs, taxable 13th month/bonuses in excess of non-taxable thresholds).
- Exclude items subject to final tax (e.g., fringe benefits taxed under the FBT regime—these are the employer’s liability and do not appear as compensation tax credits to the employee).
Prepare and sign Form 2316 (partial-year)
- Cover January 1 to date of separation (or from date of hire if mid-year hire).
- Ensure YTD totals for taxable and non-taxable pay, statutory contributions (SSS/PhilHealth/HDMF), and withholding taxes are accurate.
Release to the employee
- Provide the original, signed 2316 (employer and employee signatures).
- Keep employer copies for records retention (see §10).
Coordinate holds and clearances
- Do not withhold the 2316 as leverage for clearance; the certificate is a statutory information return. Use standard clearance processes separately.
If errors are discovered
- Issue an amended 2316 and provide it to the employee (and, if already submitted to BIR, follow your usual amendment protocol and keep documentation).

5) Duties when an employee joins (new employer)

Request and obtain the employee’s prior 2316 promptly
- This allows proper annualization by adding prior YTD figures to your YTD.
Annualize using combined YTD
- Add prior employer’s taxable compensation, non-taxable items, and tax withheld to current YTD.
- Recompute the annual tax based on the aggregate; adjust withholding in the remaining payroll runs (typically December) to cover any under-/over-withholding.
If no prior 2316 is provided in time
- Annualize based on your own payroll YTD only.
- Inform the employee that because they had multiple employers in the year, they will likely need to file their own Annual ITR (BIR Form 1700) by 15 April of the following year to reconcile full-year tax across employers.
Year-end 2316
- Issue the full-year 2316 (covering the period the worker is with you). If the employee had multiple employers, note that substituted filing does not apply; the 2316 will serve as attachments to the employee’s Form 1700.

6) Duties of the employee who transfers

Collect your partial-year 2316 from the former employer and submit it to your new employer as soon as possible.
If you worked for more than one employer in the same year (even successively), you are generally not qualified for substituted filing. File BIR Form 1700 (Annual ITR for Individuals Earning Purely Compensation Income) on or before 15 April of the following year, attaching all your 2316s.
Keep copies of all 2316s and payroll records for at least the prescriptive period (see §10).
Check the numbers: Compare YTD pay and tax on your final payslip and 2316; request correction if there are discrepancies.

7) Substituted filing: when it applies and when it doesn’t

Applies (typical case):

You are a pure compensation earner who had only one employer for the entire calendar year, with correct withholding.
Your employer issues a duly signed 2316. You do not file Form 1700.

Does not apply (you must file Form 1700):

You had two or more employers during the year (concurrent or successive), regardless of whether each withheld correctly.
You received non-compensation income requiring a return (e.g., business income, mixed income, or items without/insufficient withholding).
There were withholding shortfalls not corrected through annualization.

8) Contents of Form 2316 and common problem areas

Key fields typically include:

Employee and employer identification (TINs, RDO, registration details).
Taxable compensation (regular pay, 13th month/bonuses to the extent taxable, allowances).
Non-taxable benefits (statutory exclusions like de minimis benefits within ceilings, the non-taxable portion of 13th-month/other benefits within the statutory cap, government-mandated contributions).
Withholding tax per period and YTD.
Signatures of employer’s authorized representative and the employee.

Common errors to avoid

Omitting prior-employer YTD when annualizing.
Misclassifying benefits (e.g., putting an FBT-subject item into compensation, or treating taxable allowances as non-taxable).
Forgetting to include holiday/OT/Night Diff and final payouts (e.g., monetized leave, taxable separation pay where applicable).
Mismatch between 2316 and Alphalist/books.
Missing signatures or incorrect TINs.

9) Special situations

Minimum Wage Earners (MWEs): Generally exempt from income tax on basic pay and certain benefits; still issue 2316 showing compensation and zero tax.
Concurrent employment: Each employer issues its own 2316. The employee must file Form 1700 to reconcile total annual tax.
Foreign hires/expats: Tax residency and treaty relief may affect withholding; however, the employer still issues 2316 for Philippine-sourced compensation actually subjected to withholding.
Separated due to redundancy, illness, death: Certain separation benefits may be tax-exempt if due to causes beyond the employee’s control (subject to rules). The 2316 should reflect only compensation items; exempt separation benefits not subject to withholding are typically disclosed/handled separately.
Corrections after BIR submission: Issue an amended 2316; maintain an audit trail (explanation memo, recalculations, and employee acknowledgment).

10) Record-keeping and retention

Employers: Keep copies of issued and received 2316s, payroll registers, proofs of withholding remittance, and Alphalists for at least the three-year prescriptive period counted from the last day prescribed by law for filing the return or from the date of filing, whichever is later. Many companies adopt a longer retention (up to ten years) as a conservative practice, especially for electronic records.
Employees: Keep your 2316s and related tax documents for at least three years.

11) Penalties for non-compliance (high-level)

Under the NIRC, failure to withhold, remit, file/submit information returns, or issue certificates can trigger:

Surcharges and interest on deficiencies.
Compromise penalties as applicable.
Possible criminal liability for willful failures (§ 255), without prejudice to civil assessments.

12) Practical compliance roadmap (HR/Payroll checklist)

On separation
- Finalize pay and tax; issue partial-year 2316 (signed) with or shortly after final pay.
- Update Alphalist tags (separated employees).
On boarding a transferee
- Collect prior 2316; encode YTD import for annualization.
- If not provided, flag employee for self-filing (Form 1700).
Year-end
- Annualize using consolidated YTD; adjust December withholding.
- Issue full-year 2316 to all employees by late January.
- Submit 2316s and Alphalist on statutory due dates; retain proofs.
After year-end
- Handle amendments, if any; maintain organized records for audit.

13) FAQs

Q: My old employer hasn’t given me my 2316. What can I do? Ask HR/payroll in writing and cite that you need it for your new employer’s annualization/Form 1700. If unresponsive, elevate within the company; you may also seek assistance from the BIR in your RDO.

Q: I changed jobs in June. Do I qualify for substituted filing? Generally no. Because you had more than one employer in the year, you must file Form 1700 by 15 April next year, attaching both employers’ 2316s—unless very specific exceptions apply and your new employer successfully annualized using your prior 2316 (policy varies; conservative approach is to self-file).

Q: Do I need to sign my 2316? Yes. The employee and the authorized employer representative should sign. Unsigned certificates may be rejected.

Q: Are SSS, PhilHealth, and Pag-IBIG contributions shown? Yes, typically as non-taxable/mandatory contributions and used in tax computation/annualization.

14) Key takeaways

Former employer: Issue a partial-year 2316 promptly at separation.
New employer: Collect the prior 2316 and annualize using combined YTD; otherwise, advise the employee to file Form 1700.
Employee: Keep all 2316s; if you had multiple employers, plan to file by 15 April.
Everyone: Mind the year-end deadline to issue and submit 2316s and keep records for at least three years.

This article is general information, not legal or tax advice. For edge cases (e.g., expatriate assignments, complex benefits, or disputed tax residency), consult your tax adviser or your Revenue District Office (RDO).