Starting with the June 10 and June 15, 2025 payrolls, Benilde will implement the Annualized Tax Method, which will be reflected in the new payroll system, Traverse. This change ensures a more accurate, fair, and consistent approach to tax computation throughout the year.
What’s the difference between the Annualized and Semi-monthly Tax Method?
The Annualized Tax Method calculates your tax based on your projected annual income. It adjusts automatically throughout the year as your actual income changes. On the other hand, the Semi-monthly Tax Method computes your tax per cutoff, assuming a fixed income each period, even if your income varies.
Benilde previously used the semi-monthly method, but it also had the following issues:
- Inaccurate tax computation due to variable income
- Risk of over- or under-withholding of taxes
- Year-end tax surprises due to delayed adjustments
Your tax is computed based on your income tax bracket. You can learn more about this by going to this link.
Why is the Annualized Tax Method better for you?
- More accurate deductions: Your taxes adjust according to your actual total income for the year.
- More consistent net pay: Reduces the risk of big surprises later on, since the taxes are corrected in real-time.
- Fewer year-end adjustments: Helps you avoid sudden, large deductions in December due to underpaid taxes earlier in the year.
- Automatic adjustments: Applies to bonuses, allowances, overtime, or leaves without pay.
When will my tax deduction increase?
You may notice a higher tax deduction only if:
- A new or one-time income (like a bonus or overtime) is added, and
- Your total projected annual income increases enough to move into a higher tax bracket.
This method ensures tax accuracy while minimizing unnecessary deductions.
Switching to the Annualized Tax method gives associates more accurate tax computation, stable take-home pay, fewer surprises, and BIR-compliant deductions. This change supports both compliance and employee peace of mind.
If you have any questions or concerns about your tax computation, contact the Payroll Helpdesk.