Introduction

The Philippine income tax system, governed primarily by the National Internal Revenue Code (NIRC) of 1997, as amended by various laws including the Tax Reform for Acceleration and Inclusion (TRAIN) Law (Republic Act No. 10963) and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law (Republic Act No. 11534), imposes taxes on the income of individuals based on a graduated rate structure. Historically, tax status categories played a significant role in determining personal and additional exemptions, which reduced taxable income. These categories included distinctions based on marital status and the presence of qualified dependents, such as Single, Head of the Family (often abbreviated as HOF or HOH for Head of Household in some informal references), and Married. For practical purposes, especially in withholding tax for compensation income, statuses were further specified as Married Employee (ME) or Single (which could encompass HOH with adjustments for dependents). Self-Employed (SE) individuals, while not a marital status per se, represent a distinct taxpayer category with unique filing and computation rules.

However, since the implementation of the TRAIN Law in 2018, personal and additional exemptions tied to these statuses have been repealed, rendering the tax computation uniform for all resident individuals regardless of marital or family status. Despite this, understanding these categories remains relevant for historical compliance, audits of prior years, and certain administrative processes with the Bureau of Internal Revenue (BIR). This article provides a comprehensive explanation of these status categories in the Philippine context, covering definitions, legal bases, pre- and post-reform implications, filing requirements, and related considerations.

Legal Framework and Evolution

The NIRC, under Section 24, imposes income tax on taxable income of citizens, resident aliens, and certain non-residents. Prior to 2018, Section 35 of the NIRC allowed for basic personal exemptions (BPE) and additional exemptions (AE) based on taxpayer status, as detailed in Revenue Regulations (RR) No. 2-98 and subsequent amendments. The BPE was set at PHP 50,000 for all individuals, but the ability to claim AE of PHP 25,000 per qualified dependent (up to four) depended on status.

The TRAIN Law repealed Section 35, eliminating status-based exemptions and introducing a tax-exempt threshold of PHP 250,000 on annual taxable income, with graduated rates applying thereafter. The CREATE Law further adjusted rates downward starting in 2021. While statuses no longer affect tax liability directly, they are still reported in BIR forms for identification, and concepts like "head of the family" may influence other benefits or deductions (e.g., in estate tax or social security contexts).

Taxpayers are broadly classified as employees (subject to withholding) or self-employed/professionals (who compute and pay quarterly). The ME/SE distinction often arises in payroll and registration contexts, where ME refers to married employees for withholding purposes, and SE denotes self-employed individuals who handle their own tax remittances.

Single Status

Definition

A taxpayer is classified as Single if they are unmarried, not legally separated from a spouse, and have no qualified dependents. This includes never-married individuals, widows/widowers without dependents, and annulled persons without custodial responsibilities. Under the pre-TRAIN regime, Single taxpayers were entitled only to the BPE of PHP 50,000, with no AE unless they qualified as Head of the Family (see below).

Legal Basis

Section 35(A) of the NIRC (pre-repeal) provided the BPE for "each individual taxpayer." For withholding purposes, Single employees without dependents were coded as "S" in BIR Form 1902 (for new employees) or Form 2305 (for status updates). Qualified dependents, as defined in Section 35(B), include legitimate, illegitimate, or legally adopted children chiefly dependent on the taxpayer, under 21 years old, unmarried, not gainfully employed, or incapable of self-support due to disability.

Pre-TRAIN Implications

Taxable income was reduced by PHP 50,000.
No additional exemptions unless reclassified as HOH.
Withholding tax for compensation was computed using the "S" column in the withholding tax tables (RR 8-2017 and prior).

Post-TRAIN Implications

The status has no impact on tax computation. All income above PHP 250,000 is taxed at graduated rates (currently 0% on up to PHP 250,000; 15% on PHP 250,001-400,000; 20% on PHP 400,001-800,000; 25% on PHP 800,001-2,000,000; 30% on PHP 2,000,001-8,000,000; and 35% above PHP 8,000,000, as adjusted by CREATE). Single individuals file BIR Form 1700 (for pure compensation) or Form 1701 (if mixed income), with no differential treatment.

Filing and Compliance

Single taxpayers must register with the BIR using Form 1901 (for self-employed) or via employer for employees. Changes in status (e.g., marriage) require updating via Form 2305 within 10 days.

Head of Household (HOH) or Head of the Family

Definition

HOH, equivalently referred to as Head of the Family in Philippine tax law, applies to unmarried or legally separated individuals who maintain a household and provide chief support for qualified dependents. This includes single parents, unmarried individuals supporting parents or siblings, or legally separated persons with custody. Dependents must be lineal descendants or ascendants, or siblings, meeting the criteria of dependency, age, and incapacity.

Legal Basis

Pre-TRAIN, Section 35(A)(3) defined Head of the Family as "an unmarried or legally separated man or woman with one or both parents, or with one or more brothers or sisters, or with one or more legitimate, recognized natural, or legally adopted children living with and dependent upon him or her for their chief support." This status allowed claiming AE for dependents.

Pre-TRAIN Implications

BPE of PHP 50,000, plus AE of PHP 25,000 per dependent (max. 4).
For withholding, HOH employees were treated under the "S" code with dependent adjustments (e.g., "S1" for one dependent), resulting in lower withholding compared to plain Single.
Example: A single parent with two children had exemptions totaling PHP 100,000 (PHP 50,000 BPE + 2 x PHP 25,000 AE).

Post-TRAIN Implications

With exemptions repealed, HOH status no longer reduces taxable income. However, the concept persists in BIR records for identification and may affect claims for de minimis benefits or other non-tax matters (e.g., priority in government programs). Tax computation follows the uniform schedule.

Filing and Compliance

HOH taxpayers update status via Form 2305, submitting proof like birth certificates for dependents. Failure to update could lead to under- or over-withholding penalties under Section 251 of the NIRC.

Married Employee (ME)

Definition

ME refers to a married individual earning compensation income subject to withholding. This status encompasses legally married persons, regardless of dependents. In cases of dual-income couples, each spouse is treated as a separate taxpayer, with the husband presumptively claiming AE for dependents unless waived in favor of the wife.

Legal Basis

Pre-TRAIN, Section 35(A)(2) granted BPE to married individuals, and Section 35(B) allowed AE for dependents, typically claimed by the husband (RR 10-2008). For withholding, married employees were coded as "ME," with dependent suffixes (e.g., "ME2" for two dependents).

Pre-TRAIN Implications

BPE of PHP 50,000 per spouse.
AE of PHP 25,000 per dependent (max. 4), claimed by one spouse.
Withholding used "ME" tables, which mirrored "S" but accounted for family structure in practice.
Spousal waiver required a notarized form if the wife claimed dependents.

Post-TRAIN Implications

No differential tax treatment; both spouses compute tax independently on their income using the uniform rates. Joint filing is not permitted—each files separately. However, ME status is still indicated in payroll for administrative purposes.

Filing and Compliance

Married employees submit marriage certificates and dependent documents to employers. Penalties for non-disclosure include fines under Section 255 of the NIRC.

Self-Employed (SE)

Definition

SE refers to individuals engaged in business or practice of profession, not subject to employer withholding (e.g., freelancers, sole proprietors, professionals like doctors or lawyers). This is a taxpayer category rather than a marital status, but it intersects with Single, HOH, or Married for exemption purposes pre-TRAIN.

Legal Basis

Section 24(A) taxes SE individuals on net income. Pre-TRAIN, they claimed BPE and AE based on marital/family status under Section 35. Post-TRAIN, SE can opt for an 8% flat tax on gross sales/receipts above PHP 250,000 (in lieu of graduated rates and itemized deductions), per RR 8-2018.

Pre-TRAIN Implications

Exemptions applied similarly: Single SE claimed PHP 50,000 BPE; HOH SE added AE; Married SE claimed per spouse.
Quarterly payments via Form 1701Q, annualized in Form 1701.

Post-TRAIN Implications

Uniform tax schedule or 8% option (if gross sales ≤ PHP 3,000,000 and not VAT-registered).
No status-based adjustments; marital status affects only personal records.
SE must register as business taxpayers using Form 1901, pay quarterly income tax, and may deduct business expenses if not opting for 8%.

Filing and Compliance

SE file Form 1701 annually by April 15, with quarterly declarations. VAT or percentage tax may apply depending on income threshold (PHP 3,000,000 for VAT). Penalties for underdeclaration include 25% surcharge and interest.

Comparative Overview

Status/Category	Pre-TRAIN Exemptions	Post-TRAIN Tax Treatment	Filing Form (Current)	Key Considerations
Single	BPE: PHP 50,000; No AE unless HOH	Uniform rates; No exemptions	1700 (compensation) or 1701 (mixed)	Simplest; No dependent claims
HOH (Head of the Family)	BPE: PHP 50,000 + AE: PHP 25,000/dependent (max 4)	Uniform rates; Status for ID only	Same as above	Requires proof of dependency; Historical audits may review
ME (Married Employee)	BPE: PHP 50,000/spouse + AE by one spouse	Uniform rates; Separate filing	1700	Spousal coordination for benefits like 13th month exemption
SE (Self-Employed)	Same as above, based on marital status	Uniform or 8% flat option	1701	Business registration required; Quarterly payments

Other Considerations

Dependents Post-TRAIN: While exemptions are gone, qualified dependent children may still qualify for exemptions from certain benefits, like the PHP 90,000 de minimis threshold for 13th month pay.
Non-Residents: Foreigners or non-resident citizens follow different rules (e.g., 25% flat tax), unaffected by these statuses.
Penalties and Audits: Incorrect status reporting can lead to deficiencies, with penalties up to 50% under Section 248(B). Historical returns (pre-2018) may be audited up to three years (or 10 if fraud).
Updates and Reforms: As of 2025, no reinstatement of status-based exemptions is in effect, but taxpayers should monitor BIR issuances for changes.
Special Cases: Legally separated or widowed individuals revert to Single or HOH if applicable. Common-law partners are treated as Single unless legally married.

This framework ensures equitable taxation while simplifying compliance in the post-reform era. Taxpayers are advised to consult BIR or accredited professionals for personalized advice.