Under the new tax exemption law, what is the computation of tax on minimum earners with service charge?

Question

Under the new tax exemption law, what is the computation of tax on minimum earners with service charge?

Answer 1

That's a very good question.

As far as I know, those who are working in hotels and restaurants, aside from their regular salary, they receive the 85% of the service charge billed to customer.

Under the new law, service charge is not listed as part of the exempt income for minimum wage earners, following are the exempts aside from the statutory minimum wage:

1. holiday pay

2. overtime pay

3. night shift differential

4. hazard pay

As to the manner of how the service charge part will be taxed, we have to wait for the publication of the BIR of their detailed revenue regulation.