NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S.B. No.
SENATE
1149
*22 AUG 15 A 9 38
RHCEIVlDB
Introduced by SEN. WIN GATCHALIAN
AN ACT
PROVIDING FOR TAX INCENTIVES FOR EMPLOYEES ON A WORK-FROM- 
HOME OR TELECOMMUTING PROGRAM, FURTHER AMENDING FOR THE 
PURPOSE, REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997,
AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Since the emergence of the COVID-19 pandemic, the work-from-home setup 
has been an effective mechanism to retain or even improve productivity among 
employees. They get to maintain work-life-balance while still performing well In their 
respective job roles. In a survey conducted by Robert Walters, 8 in 9 professionals in 
the Philippines reflect being satisfied with their current remote working arrangements, 
with 9 out of 10 noting a similar increased level of productivity while at home.1 The 
time they spend in traffic before, they now spend with their loved ones. However, 
while employees working from home save on transportation expenses, they also incur 
additional expenses at home due to higher power consumption and the need to install 
a more reliable Internet connectivity. In effect, employees working from home
1 https://www.robertwalters.com.ph/content/dam/robert-walters/country/the- 
philippines/files/surveys/the-truth-about-working-from-home.pdf


shoulder part of the operating costs which are conventionally being paid by their 
employers when rendering onsite work.
This bill amends the Tax Code to provide for additional deduction to the 
compensation income of employees working from home, consequently lowering their 
taxes due and increasing their take home pay. The bill also provides for a tax benefit 
to the employers granting allowances to cover employees' expenses necessary for 
telecommuting.
In view of the foregoing, the passage of this bill Is e/rnesw sought.
N GATCHALIAN


NINETEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
First Regular Session 
]
SENATE
S.B. No. 1149
,(/) TIME:
BILLS & INDEX
Introduced by SEN. WIN GATCHALIAN
AN ACT
PROVIDING FOR TAX INCENTIVES FOR EMPLOYEES ON A WORK-FROM- 
HOME OR TELECOMMUTING PROGRAM, FURTHER AMENDING FOR THE 
PURPOSE, REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE 
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997,
AND FOR OTHER PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Section 34 of Republic Act No. 8424, or the National Internal Revenue
2 
Code of 1997, is hereby amended to read as follows:
3 
"Sec. 34. Deductions from Gross Income. - Except for taxpayers earning
4 
compensation income arising from personal services rendered under an
5 
employer-employee relationship where no deductions shall be allowed under
6 
this Section, AND EXCEPT AS OTHERWISE PROVIDED FOR HEREIN IN
7 
CASE OF WORK-FROM-HOME AND TELECOMMUTING EMPLOYEES, in
8 
computing taxable income subject to income tax under Sections 24(A); 25(A);
9 
9 26; 27(A), (B), and (C); and 28(A)(1), there shall be allowed the following 10
10 
deductions from gross income:
11 
(A) Expenses -


1 
(1) Ordinary and Necessary Trade, Business or Professional Expenses-
2 
(a) XXX
3 
(b) XXX
4 
(c) XXX
5 
(D) WORK-FROM-HOME OR TELECOMMUTING EMPLOYEES.
6 
NOTWITHSTANDING THE FIRST PARAGRAPH OF THIS SECTION,
7 
INDIVIDUALS 
EARNING 
COMPENSATION 
INCOME 
SHALL 
BE
8 
ENTITLED A DEDUCTION OF TWENTY-FIVE PESOS (P25.00) FROM
9 
THEIR TAXABLE INCOME FOR EVERY HOUR WORKED UNDER A
10 
WORK-FROM-HOME OR TELECOMMUTING ARRANGEMENT.
11 
PROVIDED, THAT, THE EMPLOYEE SHALL CERTIFY UNDER OATH, THE
12 
NUMBER OF HOURS SERVED UNDER THE WORK-FROM-HOME OR
13 
TELECOMMUTING PROGRAM FOR THE YEAR, WHICH SHALL BE FILED
14 
AS AN ATTACHMENT TO THE EMPLOYEE'S INCOME TAX RETURN.
15
16 
ALLOWANCES OR OTHER BENEFITS GRANTED BY EMPLOYERS TO
17 
THEIR EMPLOYEES TO COVER EXPENSES NECESSARY FOR
18 
TELECOMMUTING, NOT EXCEEDING TWO THOUSAND PESOS (P2,000)
19 
PER MONTH, SHALL BE CONSIDERED AS A NON-TAXABLE BENEFIT.
20 
AMOUNTS GRANTED IN EXCESS SHALL BE SUBJECTED TO EXISTING
21 
TAX RULES; PROVIDED, THAT, EMPLOYEES RECEIVING THIS BENEFIT
22 
SHALL NO LONGER BE ENTITLED TO THE HOURLY DEDUCTION FROM
23 
INCOME TAX PROVIDED FOR IN THE PRECEDING PARAGRAPH;
24 
PROVIDED FURTHER, THAT, EMPLOYERS SHALL BE ENTITLED TO AN
25 
ADDITIONAL FIFTY PERCENT (50%) INCOME TAX DEDUCTION FOR
26 
ALLOWANCES GRANTED WITHIN THE SPECIFIED CEILING.
27
28 
Sec. 2. Implementing Rules and Regulations. — The Department of Finance,
29 
together with the Bureau of Internal Revenue, shall promulgate the rules and


1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
regulations to implement this Act within ninety (90) days from the effectivity of this 
Act.
Sec. 3. Separability Clause, —If any provision or part thereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall 
remain valid and subsisting.
Sec. 4. Repealing Clause. — Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule, or regulation contrary to or 
inconsistent with the provisions of this Act is hereby repealed, modified, or amended 
accordingly.
Sec. 5. Effectivity. — This Act shall take effect fifteen (15) days after Its 
publication In at least (2) newspapers of general circulation In the Philippines.
Approved,