BIR Form 1604-C Annual Information Return Compensation

Overview

BIR Form 1604-C, officially titled "Annual Information Return of Compensation Income Paid/Payable to Employees," is a mandatory annual filing requirement for all employers in the Philippines. This form, commonly known as the "Alphalist of Employees," consolidates all compensation payments made to employees during the calendar year and serves as the employer's official record of employee compensation for tax administration purposes (BIR Revenue Memorandum Order No. 20-2018, as amended).

Legal Basis and Filing Requirements

The requirement to file Form 1604-C is mandated under the National Internal Revenue Code (NIRC) §79(A) and BIR Revenue Memorandum Order (RMO) No. 20-2018. All employers, including government agencies, private corporations, partnerships, and self-employed individuals with employees, must file this return. The form must be filed electronically through the BIR's e-Services portal or through authorized BIR offices on or before March 10 of the following year (or the next working day if March 10 falls on a weekend or holiday).

What Information Must Be Reported

Form 1604-C requires employers to report the following information for each employee:

• Employee's full name and Tax Identification Number (TIN)
• Employee's address and contact information
• Total compensation paid during the year (wages, salaries, bonuses, allowances)
• Income tax withheld (if applicable)
• Contributions to government programs (SSS, PhilHealth, Pag-IBIG)
• Other deductions and benefits provided
• Employment status (regular, contractual, seasonal, or casual)
• Period of employment during the year

Compensation Covered Under Form 1604-C

The form covers all forms of compensation income as defined 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 and termination benefits
• Taxable benefits (e.g., use of company vehicle, housing provided)
• Fringe benefits subject to tax under BIR Ruling DA-489-03

Filing Deadlines and Penalties

The annual deadline for filing Form 1604-C is March 10 of the year following the tax year being reported. For example, compensation paid in 2024 must be reported by March 10, 2025. Failure to file or late filing incurs penalties under NIRC §288:

• Failure to file: 25% surcharge plus 12% annual interest on unpaid taxes
• Late filing: Proportional penalty based on days of delay
• Incomplete or inaccurate information: Administrative penalties and possible criminal liability

Electronic Filing and BIR e-Services

As of 2018, all employers are required to file Form 1604-C electronically through the BIR's e-Services portal (eservices.bir.gov.ph) or through authorized third-party software providers accredited by the BIR. Manual filing is no longer accepted except in cases of documented system failure, with prior written approval from the BIR. The electronic system validates data in real-time and provides immediate confirmation of receipt.

Reconciliation with Other Tax Forms

Information reported in Form 1604-C must reconcile with:

• Form 1601-C (Annual Information Return of Income Payments): For non-employee compensation (professional fees, consultancy)
• Form 1601-F (Annual Information Return of Fringe Benefits): For taxable fringe benefits provided to employees
• Form 2316 (Certificate of Compensation Income Tax Withheld): Individual employee certificates issued for withholding tax purposes
• Monthly BIR Form 1601-C (Quarterly): Quarterly information returns filed during the year

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 properly reported in the year paid, not accrued