What Are Withholding Taxes?
Withholding taxes are taxes that businesses are required to deduct from certain payments and remit to the Bureau of Internal Revenue (BIR). These commonly apply to employee salaries, professional fees, rent, contractor payments, and other transactions depending on the nature of the expense.
For many businesses, withholding taxes become one of the more complex parts of compliance. Requirements can vary based on payment type, tax classification, and reporting rules, and errors or missed deadlines may lead to penalties and unnecessary stress.