BIR Form 1604-C Annual Information Return Compensation
Updated June 13, 2026
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Definition
BIR Form 1604-C is the Annual Information Return of Income Taxes Withheld on Compensation. Every employer that withholds tax on wages files it to report, employee by employee, the compensation paid during the calendar year and the tax withheld, through the alphalist of employees that forms part of the return.
BIR Form 1604-C is the employer's year-end summary of withholding on compensation. The alphalist of employees is part of the return, so there is no separate alphalist form. The totals must agree with the monthly remittances made on BIR Form 1601-C and with the BIR Form 2316 certificates given to employees. The legal basis is NIRC Section 83(B), which requires every employer that withholds tax on wages to submit, on or before January 31 of the following year, an annual information return listing its employees, each employee's compensation and the tax withheld.
Detailed explanation
Overview
BIR Form 1604-C, the Annual Information Return of Income Taxes Withheld on Compensation, is filed by every employer in the Philippines that withholds tax on its employees' wages. The alphalist of employees is part of the return. Together they show, employee by employee, the compensation paid during the calendar year and the tax withheld.
Legal Basis and Filing Requirements
NIRC §83(B) requires every employer that withholds tax on wages to submit, on or before January 31 of the following year, an annual information return listing its employees, the compensation of each, and the taxes withheld. Government agencies, corporations, partnerships and individuals with employees are all covered. The return is filed through the BIR's electronic filing channels.
What Information Must Be Reported
For each employee the alphalist shows:
- Employee's full name and Tax Identification Number (TIN)
- Nationality and employment status
- Gross compensation paid during the year
- Income tax withheld
- Employee share of SSS, GSIS, PhilHealth and Pag-IBIG contributions and union dues (non-taxable)
- Non-taxable 13th month pay and other benefits, and de minimis benefits
- Taxable compensation
- Period of employment during the year
Compensation Covered Under Form 1604-C
The form covers compensation income under NIRC §32(A)(1), including:
- Basic salary and wages
- Bonuses (Christmas, mid-year, performance-based)
- Allowances (transportation, meal, clothing, housing)
- Overtime pay and hazard pay
- Commissions and incentives
- Separation pay (reported as non-taxable when the separation is for a cause beyond the employee's control)
- Taxable benefits of rank-and-file employees
- Benefits above the de minimis ceilings and the ₱90,000 exclusion
Filing Deadlines and Penalties
Form 1604-C is due on or before January 31 of the year after the year being reported. For example, compensation paid in 2025 is reported by January 31, 2026. The penalties are:
- Failure to file: ₱1,000 for each failure, up to ₱25,000 in a calendar year (NIRC §250)
- Micro and small taxpayers: ₱500 for each failure, up to ₱12,500 (RA 11976, RR 6-2024)
- Unremitted or under-withheld tax: 25% surcharge plus 12% annual interest (NIRC §248, §249)
Electronic Filing
The BIR requires Form 1604-C and its alphalist to be submitted electronically, through eFPS or eBIRForms, with the alphalist in the prescribed electronic format. The filing confirmation should be kept with the employer's records.
Reconciliation with Other Tax Forms
Information reported in Form 1604-C must agree with:
- Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation): The twelve monthly remittances for the year
- Form 1604-F (Annual Information Return of Final Withholding Taxes): Where fringe benefit tax on managerial and supervisory employees is reported
- Form 2316 (Certificate of Compensation Payment/Tax Withheld): The certificates given to each employee
- Form 1604-E (Annual Information Return, Expanded Withholding): Where payments to non-employees such as consultants belong instead
Common Issues and Compliance
Employers must ensure that:
- All employees on payroll during the year are included, even if employed for only part of the year
- Compensation amounts match payroll records and bank disbursement statements
- Tax withholding amounts are accurate and match Form 2316 issued to employees
- Employee TINs are correctly entered; mismatched or invalid TINs may cause BIR processing delays
- Separation pay and final compensation are reported in the year paid
Why it matters
Form 1604-C is a mandatory filing for every employer that withholds tax on compensation. Missing it costs ₱1,000 for each failure, up to ₱25,000 a year (NIRC §250), or ₱500 and ₱12,500 for micro and small taxpayers. For employees, the figures in the alphalist support substituted filing: an employee who qualifies does not file an annual return, and the employer's Form 2316 stands in for it. Accurate filing protects both sides in an audit.
How it works
Gather Employee Compensation Data
Compile all compensation paid to each employee during the calendar year from payroll records, including wages, bonuses, allowances, and benefits. Ensure all employees (regular, contractual, seasonal, and casual) are included. Verify that amounts match bank disbursements and accounting records.
Prepare Form 1604-C Data File
Enter each employee's TIN, name, period of employment, gross compensation, non-taxable items (13th month pay and other benefits up to ₱90,000, de minimis benefits, and the employee's share of SSS, PhilHealth and Pag-IBIG contributions), taxable compensation and tax withheld. Check that every TIN is complete and correctly formatted.
File Electronically with BIR
File Form 1604-C with the alphalist on or before January 31 of the following year (NIRC §83(B)), using the BIR's electronic filing channels. Keep a copy of the filed return and the filing confirmation for audit purposes.
Issue Form 2316 to Employees
Give each employee a Form 2316 (Certificate of Compensation Payment/Tax Withheld) on or before January 31 of the following year, or on the day of the last payment of wages if employment ends during the year (NIRC §83(A)). Employees who qualify for substituted filing rely on this certificate instead of filing an annual return.
Examples
Small Business with 10 Employees
Juan dela Cruz runs a retail store with 10 regular employees earning ₱18,000 to ₱25,000 a month. Total compensation paid for the year is ₱2,400,000. He files Form 1604-C by January 31, listing each employee's TIN, monthly-based compensation for the year, and income tax withheld. Late filing exposes him to the ₱1,000 per failure penalty under NIRC §250, or ₱500 if his business is micro or small.
Manufacturing Company with 150 Employees
ABC Manufacturing Corp. employs 150 workers, each paid a ₱20,000 monthly base salary, a ₱5,000 monthly transportation allowance, a ₱3,000 monthly meal allowance and a ₱50,000 year-end bonus. Gross compensation per employee is ₱386,000 a year ((₱20,000 + ₱5,000 + ₱3,000) × 12 + ₱50,000). Form 1604-C lists each employee's gross pay, the non-taxable part (the bonus falls within the ₱90,000 exclusion) and the tax withheld.
Professional Services Firm with Contractual Staff
Maria Santos' accounting firm has 8 regular employees earning ₱600,000 to ₱900,000 a year and 5 outside consultants paid ₱150,000 to ₱300,000 per project. Only the 8 employees go in Form 1604-C. The consultants are not employees; their professional fees are subject to expanded withholding and are reported in Form 1604-E.
Government Agency with Seasonal Workers
A municipal government employs 200 permanent staff and 50 seasonal workers during harvest season. Permanent staff earn ₱240,000 a year; seasonal workers earn ₱60,000 for 3 months. Form 1604-C lists all 250, each with the period worked. With taxable pay at or below ₱250,000, their income tax under the graduated table is ₱0.
Multinational Corporation with Expatriate Employees
XYZ Corp. employs 500 Filipino nationals and 20 expatriates. Filipino employees' compensation ranges from ₱300,000 to ₱2,000,000 a year; expatriates earn ₱1,500,000 to ₱5,000,000. Form 1604-C reports all employees. Expatriates who are resident aliens are taxed at the same graduated rates as Filipino employees on their Philippine-source compensation, and the employer withholds through the regular withholding tables.
Common misconceptions
- Myth: Form 1604-C is only required for large companies with many employees.
- Fact: Every employer that withholds tax on wages must file Form 1604-C, whatever its size (NIRC §83(B)). Even a single employee triggers the filing requirement.
- Myth: Compensation paid to independent contractors or consultants should be reported in Form 1604-C.
- Fact: Form 1604-C covers employees only. Professional fees and other payments to non-employees are subject to expanded withholding, remitted on Forms 0619-E and 1601-EQ, and reported annually on Form 1604-E.
- Myth: Form 1604-C must be filed monthly like payroll tax returns.
- Fact: Form 1604-C is filed once a year, by January 31 of the following year. The monthly return for tax withheld on compensation is Form 1601-C.
- Myth: If an employee leaves mid-year, they should not be included in Form 1604-C.
- Fact: All employees paid compensation during the year are included, with the period of employment stated, including those who left mid-year.
- Myth: Fringe benefits provided to employees do not need to be reported in Form 1604-C.
- Fact: Taxable benefits of rank-and-file employees are part of compensation and appear in Form 1604-C. Fringe benefits of managerial and supervisory employees go through the fringe benefit tax instead (NIRC §33).
Questions people ask
What is the deadline for filing Form 1604-C?
Form 1604-C is due on or before January 31 of the year after the year being reported (NIRC §83(B)). For example, 2025 compensation is reported by January 31, 2026.
Can Form 1604-C be filed manually or by mail?
The BIR requires the return and the alphalist to be submitted through its electronic channels, such as eFPS or eBIRForms, with the alphalist sent in the prescribed electronic format.
What happens if an employer files Form 1604-C late?
The penalty for failing to file an information return such as Form 1604-C on time is ₱1,000 for each failure, up to ₱25,000 in a calendar year (NIRC §250). Micro and small taxpayers pay ₱500 per failure, up to ₱12,500 (RA 11976, RR 6-2024). Unremitted withholding tax is a separate matter: it carries the 25% surcharge and 12% annual interest (NIRC §248, §249).
Must Form 1604-C include employees who worked only part of the year?
Yes. Every employee paid compensation during the calendar year is included, with the period of employment stated. This covers employees hired mid-year, those who resigned, and those on leave.
How does Form 1604-C relate to Form 2316 issued to employees?
Form 1604-C is the employer's annual summary of all employee compensation; Form 2316 is the individual certificate given to each employee showing compensation and tax withheld. The figures in the 1604-C alphalist should agree with the Forms 2316 issued.
Are fringe benefits included in Form 1604-C?
Benefits of rank-and-file employees that are taxable form part of their compensation and are reported in Form 1604-C. Fringe benefits of managerial and supervisory employees are subject to the 35% fringe benefit tax paid by the employer and are reported separately (quarterly on Form 1603Q and annually on Form 1604-F). De minimis benefits within their ceilings are reported as non-taxable.
What penalties apply if Form 1604-C contains inaccurate information?
Each failure to file or to supply required information can draw the ₱1,000 penalty under NIRC §250, up to ₱25,000 a year. If the errors hide under-withheld or unremitted tax, the employer also owes that tax with the 25% surcharge and 12% annual interest (NIRC §248, §249).
Can an employer amend Form 1604-C after filing?
Yes. Errors found after filing are corrected by filing an amended Form 1604-C through the same electronic channel. File the amendment as soon as the error is found.
In practice
- Employers must reconcile Form 1604-C data with monthly payroll records, bank disbursements, and accounting ledgers to ensure accuracy and avoid audit discrepancies.
- The alphalist in Form 1604-C identifies which employees qualified for substituted filing, and the BIR can match it against Forms 2316 and any annual returns (Form 1700 or 1701) that employees file.
- Inaccurate or missing employee TINs in Form 1604-C cause BIR processing delays and may trigger employer audits; employers should verify TINs before filing.
- Withholding and remittance records behind Form 1604-C are what the BIR reviews when it checks the compensation expense an employer claims on its annual income tax return.
- Employers that miss the January 31 deadline face the ₱1,000 per failure penalty under NIRC §250, and any unremitted tax carries the 25% surcharge plus 12% annual interest.
Next steps
Learn more
BIR Form 1604-C Filing Guide
Step-by-step instructions for completing and filing Annual Compensation Info Return
Withholding Tax Calculator
Calculate monthly withholding taxes for Form 1604-C reconciliation
BIR Form 1601-C Monthly Return
Monthly withholding tax return that feeds into Form 1604-C annual filing
Employee Compensation Tax Guide
Complete guide to Philippine employee compensation taxation and reporting
Annual Tax Compliance Calendar
Important filing deadlines including Form 1604-C January 31 deadline
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Sources & References (1)
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 1604-C (Annual Information Return: Compensation).” bir.gov.ph. Bureau of Internal Revenue, BIR Form 1604-C. Source checked .