Probationary Employee & BIR Form 2316
A comprehensive primer for Philippine employers, HR officers, accountants, and probationary workers
1. What is BIR Form 2316?
BIR Form 2316, officially the “Certificate of Compensation Payment/Tax Withheld”, is issued by every employer to each employee who received purely compensation income during a calendar year. It shows:
- total taxable compensation income
- statutory deductions (SSS, PhilHealth, Pag-IBIG)
- non-taxable benefits and 13th-month pay
- tax withheld by the employer on a monthly and cumulative basis
- the employer’s details and BIR accreditation numbers
Under § 2.83.1 of Revenue Regulations (RR) No. 2-98, as amended, this certificate must be accomplished in duplicate—one copy for the employee, one for the BIR.
2. Why probationary employees are squarely covered
- “Employee” is defined broadly in both the Tax Code and labor statutes. Neither distinguishes between permanent, casual, contractual, apprentice, nor probationary status for purposes of withholding taxes.
- A probationary employee earns compensation income from an employer–employee relationship; hence the employer must withhold and report taxes in exactly the same way as for a regular employee.
- The Labor Code (Art. 296 [281]) merely limits security of tenure during probation; it does not curtail any statutory monetary or tax-related rights.
Practical upshot: The moment an employer starts paying wages—even for a single day of probation—it also assumes the correlated duty to prepare and release BIR Form 2316 for that individual.
3. Statutory basis for the employee’s right to a copy
| Provision | Key command | Relevance to probationary workers |
|---|---|---|
| National Internal Revenue Code (NIRC) § 58(A) | Employers shall deduct and withhold taxes on compensation. | Creates the duty to document said withholding. |
| RR 2-98 § 2.83.1 | “The employer shall furnish each employee a copy of Form 2316 on or before January 31 of the succeeding year or upon separation.” | No qualification as to employment status. |
| RR 11-2018 & RR 16-2021 | Mandate substituted filing—an employee who receives BIR 2316 need not file a separate ITR if he has one employer for the year. | Probationary employees often shift employers within the same year; their 2316 is required by the next employer for tax crediting. |
| Labor Code Art. 118 | Employees may file money-claims for any form of “withheld wages or benefits due them by operation of law.” | DOLE may enforce release of BIR 2316 as an incidental monetary benefit. |
4. Timing rules
| Scenario | Deadline to issue Form 2316 to the employee | Deadline for the employer to submit all 2316s to BIR |
|---|---|---|
| Still employed on 31 Dec of the year | 31 January of the following year | 28 February (eFPS) / 31 March (non-eFPS) via Alphalist |
| Resignation, termination, or end-of-probation during the year | Within 30 days from date of separation | Include in annual Alphalist; no separate mid-year filing |
Best practice: Hand the certificate together with the employee’s final pay and quitclaim.
5. Employer penalties for non-issuance
| Infraction | Legal basis | Sanction |
|---|---|---|
| Failure to furnish employee’s copy | NIRC § 255 & RR 2-98 | Fine ₱10 000 – ₱20 000 and/or imprisonment 1–2 years |
| Failure to include certificate in Alphalist | NIRC § 250 | Incremental surcharge/interest; disallowance of salary expense deduction |
| Refusal to release despite demand | Art. 118, Labor Code | Possible money-claim before DOLE; attorney’s fees; moral damages in extreme bad-faith cases |
6. Practical uses of Form 2316 for probationary workers
- Substituted filing of Income Tax Return (if they had only one employer all year).
- Tax credit transfer when moving to a new employer within the same calendar year—prevents double-withholding.
- Visa, loan, and credit-card applications requiring proof of income.
- Internal payroll audit when contesting alleged salary-deduction errors.
7. Common employer misconceptions debunked
| Myth | Reality |
|---|---|
| “We’re not obliged because the employee stayed < 6 months.” | Length of stay is irrelevant. Duty arises once wages are paid. |
| “We can release it together with the Certificate of Employment (COE) upon request only.” | The release is automatic and proactive, no request needed. |
| “Because the worker was project-based he must get BIR Form 2307 instead.” | Project-based employees on payroll receive 2316 (compensation); 2307 covers professional fees/FS contractor income taxed under expanded withholding. |
| “A digital PDF is enough.” | Allowed if it bears either (a) wet signature, (b) qualified digital signature, or (c) the employer’s BIR stamp/barcode from the Interactive BIR Form. The employee may still demand a printed copy. |
8. Data Privacy & record-retention note
- BIR 2316 contains sensitive personal and financial data.
- Under the Data Privacy Act of 2012 and NPC Advisory Opinion 2017-38, employers must adopt access controls and keep the certificate for at least 5 years (parallel to tax audit prescriptive periods).
- Sending via un-encrypted email without employee consent may constitute a breach.
9. Remedies when the employer refuses to release
Send a formal demand letter citing RR 2-98 and the penalty clauses.
File a BIR Complaint-Affidavit (Enforcement Service, Legal Division)—enforcement often triggers quick compliance.
Bring a money-claim before the DOLE-NLRC or DOLE Single-Entry Approach (SEnA); NLRC has awarded nominal damages for willful withholding.
For urgent needs (e.g., new employer onboarding), the employee may:
- secure a BIR 1905 to transfer registration, AND
- provide payslips + an Affidavit of Income while awaiting the certificate—but this is merely provisional.
10. Checklist for HR / Accounting when a probationary employee leaves
| ✔ | Item |
|---|---|
| □ | Compute final pay (earned wages, OT, unused SIL) |
| □ | Re-run last payroll to ensure correct year-to-date taxes |
| □ | Prepare BIR Form 2316 with correct “Date of Separation” |
| □ | Obtain signatures (authorized signatory and employee, or note “employee unavailable”) |
| □ | Give the employee’s copy (print or secure e-copy) within 30 days |
| □ | Keep one signed copy in 2316 binder / e-archive for five years |
| □ | Reflect separation in the next Alphalist of Employees |
11. Key take-aways
- Even a one-day probationer has a full statutory right to a BIR Form 2316.
- Non-issuance exposes the employer to tax fines, potential imprisonment, and DOLE sanctions.
- The certificate is critical to avoid double-taxation when the employee transfers mid-year.
- Release must be proactive—not merely “on request”—and within 30 days of separation, or by 31 January of the following year for those still on the roster.
- Digital copies are valid if properly signed, but the employee can still insist on a physical original.
Disclaimer: This article is for general informational purposes and is not a substitute for individualized tax or legal advice. For edge-case scenarios (e.g., multiple concurrent probationary roles, foreign hires, or compressed-workweek schemes), consult a licensed Philippine tax professional or labor counsel.