BIR Form 1601-C Monthly Compensation Withholding
Updated June 13, 2026
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Definition
BIR Form 1601-C is the Monthly Remittance Return of Income Taxes Withheld on Compensation. Employers acting as withholding agents use it to report the compensation paid to all employees during a calendar month and to remit the income tax withheld from that compensation to the Bureau of Internal Revenue.
BIR Form 1601-C is the monthly reporting and payment form for income tax withheld from employees' compensation. Under Section 79 of the National Internal Revenue Code and Revenue Regulations No. 2-98, as amended by RR 11-2018, every employer acting as a withholding agent files this return and remits the tax on or before the 10th day of the following month; taxes withheld for December are due on or before January 15. Employers enrolled in eFPS follow the deadlines set by BIR issuances for eFPS filers. The form captures total compensation paid, the non-taxable portions, taxable compensation, the tax withheld and any adjustments from previous months.
Detailed explanation
Overview
BIR Form 1601-C, the "Monthly Remittance Return of Income Taxes Withheld on Compensation," is the monthly return employers in the Philippines file with the Bureau of Internal Revenue (BIR). It reports the compensation paid to employees during a calendar month and remits the income tax withheld from it (NIRC §79, RR 2-98).
Legal Basis and Requirement
The requirement rests on NIRC §79 and Revenue Regulations No. 2-98, as amended by RR 11-2018, which require employers to withhold income tax from employee compensation and remit it to the BIR.
Who Must File
Every withholding agent or payor required to deduct and withhold tax on compensation files Form 1601-C. This includes individuals, partnerships and corporations that employ workers, non-profit organizations, and government agencies (NIRC §79). A registered withholding agent that withheld no tax in a month still files the return and marks that no tax was withheld.
Filing Frequency and Deadline
The return is filed and the tax paid on or before the 10th day of the month after the month of withholding; taxes withheld for December are due on or before January 15. Employers using eFPS follow the deadlines set by BIR issuances for eFPS filers. Late filing and payment draw a 25% surcharge plus interest at 12% a year (NIRC §248, §249); micro and small taxpayers pay 10% and 6% (RA 11976).
Contents of the Form
Form 1601-C asks for the employer's TIN, name and address; the month covered; total compensation paid; non-taxable compensation such as the employee's share of SSS, PhilHealth and Pag-IBIG contributions, de minimis benefits and 13th month pay within the ₱90,000 ceiling; taxable compensation; tax withheld; and adjustments from prior months.
Withholding Tax Calculation
Tax withheld is based on each employee's taxable compensation and the graduated rates from 2023 onward: 0% on annual taxable income up to ₱250,000 (about ₱20,833 a month); 15% of the excess over ₱250,000 up to ₱400,000; ₱22,500 plus 20% of the excess over ₱400,000 up to ₱800,000; and higher rates above ₱800,000 (NIRC §24(A)(2), as amended by RA 10963). Employers use the BIR withholding tax tables or the annualized method.
Filing Methods
Employers file through eFPS, through the eBIRForms package with payment online or at an authorized agent bank, or with the Revenue Collection Officer of the Revenue District Office where there is no authorized agent bank. Taxpayers required to use eFPS must file through it.
Reconciliation with Annual Return
The year's Form 1601-C remittances are summarized in BIR Form 1604-C, the Annual Information Return of Income Taxes Withheld on Compensation, due by January 31 of the following year with the alphalist of employees. These must agree with the BIR Form 2316 issued to each employee. Differences can lead to deficiency withholding tax assessments.
Penalties for Non-Compliance
Late filing or underpayment results in (1) a 25% surcharge on the unpaid tax; (2) interest at 12% a year; and (3) for willful failures, criminal prosecution (NIRC §248, §249, §255). An employer that fails to withhold is liable for the tax it should have withheld (NIRC §251).
Electronic Filing
The BIR accepts Form 1601-C through eFPS and eBIRForms, with payment through authorized agent banks and online payment channels. Under RA 11976, returns may be filed and taxes paid electronically or manually with any authorized agent bank, Revenue District Office or authorized tax software provider.
Why it matters
Employers file Form 1601-C every month to remit the income tax they withheld from employees. Late filing or underpayment exposes the employer to a 25% surcharge, interest at 12% a year and, for willful failures, criminal liability; micro and small taxpayers pay a 10% surcharge and 6% interest. Accurate filing keeps employees' tax records correct and protects the employer in an audit.
How it works
Calculate Monthly Withholding Tax per Employee
Determine each employee's taxable compensation for the month and apply the BIR withholding tax table built on the graduated rates (NIRC §24(A)(2)). For example, an employee with ₱35,000 of monthly taxable compensation (₱420,000 a year) is in the 20% bracket: ₱22,500 plus 20% of ₱20,000 equals ₱26,500 for the year, about ₱2,208 a month.
Aggregate Withholding and Prepare Form 1601-C
Add up the tax withheld from all employees for the month. Complete Form 1601-C with the employer's TIN, the month covered, total compensation, non-taxable compensation, taxable compensation and total tax withheld, including any adjustments for prior months.
File and Pay by the 10th of the Following Month
File the return and pay the tax together on or before the 10th of the following month (January 15 for December withholding), through eFPS, eBIRForms with an authorized agent bank, or the Revenue District Office. The monthly totals are later summarized in the annual BIR Form 1604-C.
Keep Payment Proof and Records
Keep the filed return, the payment confirmation or bank-validated copy, and the payroll records behind it. The year's 1601-C remittances must agree with the annual BIR Form 1604-C, its alphalist and the BIR Form 2316 issued to each employee.
Examples
Small retail business with 5 employees
Juan's retail store pays ₱15,000 a month to each of 5 employees (₱75,000 total). Each employee earns ₱180,000 a year, below the ₱250,000 zero bracket (NIRC §24(A)(2)), so no tax is withheld. Juan still files Form 1601-C for the month, marking that no tax was withheld.
Manufacturing company with mixed-income employees
Maria's factory has 20 workers. 10 have taxable compensation of ₱25,000 a month (₱300,000 a year, annual tax ₱7,500, or ₱625 a month each); 10 have ₱40,000 a month (₱480,000 a year, annual tax ₱38,500, or about ₱3,208.33 a month each). Monthly withholding is ₱6,250 plus ₱32,083.33, or ₱38,333.33, which Maria reports and pays on Form 1601-C by the 10th.
Professional services firm with high earners
Anna's accounting firm pays 3 senior accountants ₱80,000 of monthly taxable compensation each (₱960,000 a year). Annual tax per employee is ₱102,500 plus 25% of ₱160,000, or ₱142,500, which is ₱11,875 a month. Monthly withholding for the three is ₱35,625, filed and paid on Form 1601-C by the 10th (NIRC §24(A)(2)).
Non-profit organization with administrative staff
A non-profit pays 8 administrative staff ₱30,000 of monthly taxable compensation each (₱360,000 a year). Annual tax per employee is 15% of ₱110,000, or ₱16,500, which is ₱1,375 a month. The monthly 1601-C shows ₱11,000 withheld; a non-profit employer withholds and remits like any other employer (NIRC §79, RR 2-98).
Late filing and penalty scenario
Pedro's construction company files the January return on February 25 instead of February 10, with ₱50,000 of tax withheld. It owes a 25% surcharge of ₱12,500 plus interest at 12% a year for 15 days, about ₱246.58, for a total of about ₱62,746.58, and may also face a compromise penalty (NIRC §248, §249).
Common misconceptions
- Myth: Small employers with fewer than 5 employees do not need to file Form 1601-C.
- Fact: All employers, regardless of size, must file Form 1601-C monthly if they pay compensation subject to withholding tax (NIRC §79). Even a single employee triggers the filing requirement.
- Myth: Form 1601-C is filed only once a year, like the annual income tax return.
- Fact: Form 1601-C is a monthly return, due by the 10th of the following month for each calendar month (January 15 for December). The annual summary is BIR Form 1604-C.
- Myth: If an employee earns below ₱250,000 annually, no withholding tax is due and Form 1601-C can be skipped.
- Fact: A registered withholding agent still files Form 1601-C for months with no tax withheld, marking that no tax was withheld on the return.
- Myth: Withholding tax remitted to the BIR is the employer's final tax obligation for employee compensation.
- Fact: Employers must also file the annual BIR Form 1604-C with its alphalist and give each employee BIR Form 2316. SSS, PhilHealth and Pag-IBIG contributions are separate obligations outside Form 1601-C, which covers only income tax withheld (NIRC §79, RR 2-98).
- Myth: Form 1601-C can be filed late as long as the tax is paid on time.
- Fact: Form 1601-C is filed and paid together by the same deadline. A late return with late payment draws a 25% surcharge plus 12% interest a year (NIRC §248, §249).
Questions people ask
What is the deadline for filing Form 1601-C?
File and pay on or before the 10th day of the month after the month of withholding; taxes withheld for December are due on or before January 15. For example, January withholding is due by February 10. Late filing or payment adds a 25% surcharge and interest at 12% a year on the unpaid tax (NIRC §248, §249).
Can an employer file Form 1601-C electronically?
Yes. Employers can file Form 1601-C through the BIR's eFPS or the eBIRForms package and pay online or through an authorized agent bank. Taxpayers required to use eFPS must file through it.
What happens if an employer has no employees in a particular month?
If you are registered as a withholding agent on compensation but paid no compensation subject to withholding in a month, file the return and mark that no tax was withheld.
How is withholding tax calculated under the TRAIN Law?
Withholding follows the graduated rates from 2023 onward (NIRC §24(A)(2)): 0% on annual taxable income up to ₱250,000; 15% of the excess over ₱250,000 up to ₱400,000; ₱22,500 plus 20% of the excess over ₱400,000 up to ₱800,000; and higher rates above ₱800,000. Employers use the BIR withholding tax table or the annualized method to compute monthly withholding per employee.
What is the difference between Form 1601-C and Form 1604-C?
Form 1601-C is the monthly remittance return of income taxes withheld on compensation, due by the 10th of the following month. Form 1604-C is the annual information return of income taxes withheld on compensation, due by January 31 of the following year, with the alphalist of employees attached. The 1604-C summarizes the year's 1601-C remittances.
What penalties apply if Form 1601-C is filed late or withholding is underreported?
A 25% surcharge on the unpaid tax plus interest at 12% a year; micro and small taxpayers pay 10% and 6%. Willful failure can lead to criminal prosecution. An employer that fails to withhold is liable for the tax it should have withheld (NIRC §248, §249, §251).
Can an employer use payroll software to prepare and file Form 1601-C?
Yes. Payroll software can compute withholding and produce the figures for Form 1601-C. The employer remains responsible for accuracy and for filing and paying on time.
What records must an employer keep related to Form 1601-C?
Keep copies of each Form 1601-C, proof of payment, payroll registers and employee withholding records. Books and accounting records must be kept for 5 years from the day after the filing deadline, or from the filing date if filed late (NIRC §235, as amended by RA 11976).
In practice
- Employers use the BIR withholding tax table or payroll software to calculate monthly withholding per employee, then report and pay the total on Form 1601-C by the 10th of the following month.
- Large taxpayers and other employers required to use eFPS file Form 1601-C there; others use eBIRForms and pay online or through an authorized agent bank.
- The year's Form 1601-C remittances are summarized in the annual Form 1604-C and must agree with its alphalist and the BIR Form 2316 issued to each employee.
- Payroll departments keep withholding records and Form 1601-C copies for 5 years from the filing deadline (NIRC §235) to support BIR audits.
- Underreported withholding is a common audit finding; employers assessed for unpaid withholding face a 25% surcharge, 12% annual interest and, for willful failures, criminal prosecution.
Next steps
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Sources & References (2)
Primary sources and the laws, regulations, and official issuances this page relies on. Links open the recorded source documents or references.
- Bureau of Internal Revenue. “BIR Form 1601-C (Monthly Remittance of Compensation Withholding).” bir.gov.ph. Bureau of Internal Revenue, BIR Form 1601-C. Source checked .
- LawPhil Project (Arellano Law Foundation). “NIRC §79-80 (withholding on compensation): full text.” lawphil.net. NIRC of 1997 (RA 8424), Sec. 79-80. Source checked .