BIR Tax Refund Philippines: How to Claim Your Excess Withholding Tax

What Is Excess Withholding Tax?

Every month, your employer deducts withholding tax from your salary based on estimated annual income. At year-end, if the total withheld exceeds your actual income tax due, the difference is your excess withholding tax — and you are entitled to a refund.

This commonly happens when you:

• Switched jobs during the year (your new employer withholds based on your current salary, not accounting for the months you were with the old employer)
• Had a period of unemployment during the year
• Received a mid-year salary reduction
• Are entitled to tax deductions (additional exemptions, qualified premiums) not fully applied

Who Qualifies for a Tax Refund?

You may be entitled to a tax refund if you are:

• A mixed income earner (employee with side business/freelance income)
• An employee who changed employers during the year
• An employee whose employer did not perform year-end adjustment
• An employee claiming additional deductions (PERA contributions, premiums)

Pure compensation earners (one employer, January–December) whose employer performs year-end adjustment typically receive their refund directly on their last payslip of the year or January — no BIR filing required.

The Year-End Adjustment Process

Most employers are required to perform a year-end tax adjustment for their employees. By January 31 of the following year, your employer should issue your BIR Form 2316, which shows your total compensation and total taxes withheld for the year. If you are owed a refund, the employer typically credits it back to your January salary.

If your employer did NOT perform the year-end adjustment — or if you had multiple employers — you must file your own Annual Income Tax Return (ITR).

How to File Your ITR and Claim a Refund

Step 1: Get Your BIR Form 2316

Request Form 2316 from all employers you worked for during the year. If you changed jobs, you need one from each employer.

Step 2: File BIR Form 1700 or 1701

• BIR Form 1700 — For pure compensation income earners with multiple employers
• BIR Form 1701 — For mixed income earners (compensation + business/freelance)

The deadline for filing is April 15 of the following year (e.g., April 15, 2026 for the 2025 tax year).

Step 3: Submit to Your BIR RDO

File at the Revenue District Office (RDO) where you are registered. You can also file electronically through BIR's eFPS or eBIRForms system.

Step 4: Claim Your Refund

After submitting your return with a refundable amount, you must file a separate claim for refund or tax credit certificate with your RDO. The BIR has 2 years from the date of filing to process the refund.

Documents You Need

• BIR Form 2316 from each employer
• Accomplished BIR Form 1700 or 1701
• Valid government-issued ID
• Proof of TIN (Tax Identification Number)
• Bank account details for direct credit (if applicable)

How Much Can You Get Back?

The refund amount depends on how much was over-withheld. Common scenarios:

Connection to Job Changes and Final Pay

If you recently changed jobs or resigned, you are especially likely to be owed a tax refund. When you leave a job mid-year, your previous employer withholds tax based on the assumption that you would have earned that salary for the full year. Your actual annual income ends up lower, so the withholding was too high.

Use the Job Change Calculator to estimate your new net take-home pay and compare it with your current role. If you are resigning, the Final Pay Calculator helps you know exactly what you are owed from your employer before you leave.

Tips to Avoid Overpaying Taxes

• Always submit your BIR Form 2316 to your new employer when changing jobs — this helps them avoid over-withholding in the first months.
• Update your tax exemptions (additional exemptions for dependents) with HR promptly.
• If you are a freelancer or consultant on the side, file your ITR annually to reconcile all income and withholding.