I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
Here's another common, but very important, subject you shouldn't miss. Taxable income is the part of your income where your income tax comes from. This post is made special for the newly-employed as well as those planning to start a business. There are two ways taxable income is computed, depending on whether you are a business owner or employee. Remember this: Gross Income is not Taxable Income, contrary to what some people think. Income taxes are not collected from gross income except in certain circumstances we shall take up in other posts.
Employee's formula. This is computed, usually, by the employer:
Gross Compensation Income - (Personal & Additional Exemptions + Premium Payments on Health Insurance) = Taxable Income
Business Owner's formula:
Taxable Income = Net Income - (Personal & Additional Exemptions + Premium Payments on Health Insurance)
Where: Net Income = Gross Income - Business-related Expenses
Hopefully, this info on how taxable income is computed will help you in your financial planning. You should have an idea now about how much your income tax is, how much you can spend, and how much you can save.
2 comments:
Hello,
So based on your computation, my taxable income would be:
Taxable income = (Basic SAlary + Overtime) - (LAte/absences + Allowances + SSS + Philhealth + Pag-ibig)
That formula is correct right?
Thanks.. I would appreciate your reply..
Jeanina
Yes, you're correct. Sorry for the later reply. I've been rather busy
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