BIR Form 2307 for Caregiver and Nanny Placement Agencies: When Does a Corporate Client Withhold?

A private family that hires a caregiver or nanny directly, or pays a placement agency out of its own pocket for one, generally isn’t a BIR withholding agent — but a corporation that pays the same agency, for example under an expatriate relocation or employee-benefits program, is, and it withholds 2% expanded withholding tax on the agency’s entire billing, not just its placement fee. This guide is part of the BIR Form 2307 series and works through why the payor’s identity — private household versus corporate benefits program — is what flips the withholding obligation on, and how much gets withheld once it does.

Why a direct-hire caregiver or nanny isn’t a BIR withholding matter #

A family that hires a caregiver or nanny directly, without going through a placement agency, has an ordinary kasambahay employment relationship under Republic Act No. 10361 (the Batas Kasambahay) — and a private household isn’t “engaged in trade or business” through that employment, so it isn’t a BIR withholding agent on the caregiver’s wages. This is the same conclusion covered in detail in Do Household Employers Need to Withhold Tax on Kasambahay Wages?: a kasambahay’s pay almost always falls under the ₱250,000 annual income tax exemption, and even setting that exemption aside, an individual household employer simply isn’t the kind of payor RR No. 2-98 makes a withholding agent for this arrangement.

A direct-hire caregiver is functionally identical to a direct-hire kasambahay for this purpose — the job title (caregiver, nanny, yaya) doesn’t change the analysis. What matters is that the family is the direct employer of an individual providing household service, not a client paying a business for a service.

Does paying a placement agency out of pocket change anything? Usually not #

A private family that instead pays a caregiver or nanny placement agency — rather than hiring directly — to find and manage household help is, in most cases, still not a BIR withholding agent, for the same reason a homeowner paying a personal renovation contractor generally isn’t one. Section 2.57.3 of RR No. 2-98 sets out who is constituted as a withholding agent:

“(A) In general, any juridical person, whether or not engaged in trade or business; (B) An individual, with respect to payments made in connection with his trade or business.”

A private family paying an agency’s fee out of personal funds, for a purely personal household need, is an individual acting outside any trade or business — so clause (B) doesn’t reach that payment at all, and clause (A) never applies because a family isn’t a juridical person. This mirrors exactly the reasoning in Do I Need to Withhold Tax on a Home Renovation Contractor?: whether withholding applies turns on the payor’s trade-or-business connection to the specific payment, not on what kind of business the payee (contractor, or here, placement agency) happens to be. A family that separately runs a business elsewhere in its life still isn’t a withholding agent on this particular, personal payment, unless the caregiver is somehow tied to that business.

When a corporate client pays the agency instead #

The moment the payor is a corporation rather than a private individual — for example, a company’s expatriate relocation and benefits program that arranges and pays for a live-in caregiver for a transferred executive’s household, or a corporate eldercare or daycare benefit — the withholding obligation attaches, because a corporation is a withholding agent under RR No. 2-98, Section 2.57.3(A) “whether or not engaged in trade or business.” Unlike the individual test in clause (B), clause (A) carries no trade-or-business qualifier for juridical persons: a corporation’s payment to the agency is covered simply because the payor is a corporation.

This is a common structure in multinational relocation packages: rather than reimbursing the transferred employee directly, the company contracts and pays a caregiver or nanny placement agency on the household’s behalf as part of the relocation or benefits program. Because the company, not the family, is now the payor of record on that invoice, the company — not the family — carries the withholding obligation.

Full billing, not just the placement or management fee #

A caregiver or nanny placement agency functions the same way a general manpower or staffing agency does — the corporate client withholds 2% on the agency’s entire billing, including the portion that funds the caregiver’s own wages, not just the agency’s placement or management fee. This site’s BIR Form 2307 for Manpower and Staffing Agencies guide covers why this full-billing rule applies to staffing and manpower suppliers generally: the narrower agency-fee-only carve-out under RMC No. 39-2007 is limited by law to private security agencies licensed under Republic Act No. 5487, because that statute — and only that statute — makes the client primarily liable for the deployed workers’ wages and requires the agency to earmark that portion as a segregated liability rather than its own income.

No equivalent statute makes a corporate client primarily liable for a placed caregiver’s wages. The caregiver’s compensation remains the placement agency’s own employer cost, funded out of what the agency bills the corporate client, so the full invoice — wages, statutory contributions, and the agency’s own margin combined — counts as the agency’s gross income and stays inside the 2% expanded withholding tax (EWT) base. A caregiver or nanny placement agency is not a security agency, so it gets no carve-out: the same logic that keeps a warehouse-staffing agency’s full billing inside the withholding base applies here too.

Worked example: a corporate relocation benefit versus a private family payment #

Consider HomeCare Staffing Agency, which places live-in caregivers for households. The same ₱45,000 monthly billing is treated completely differently depending on who pays it.

Scenario 1 — corporate expatriate relocation program. A multinational’s expatriate relocation and benefits program pays HomeCare Staffing Agency ₱45,000 per month, covering a live-in caregiver’s full compensation package for a transferred executive’s household, as part of the executive’s relocation benefits.

The company withholds ₱900 — 2% of the entire ₱45,000 billing, not just HomeCare’s own placement or management margin — and issues BIR Form 2307 to HomeCare Staffing Agency, remitting the amount through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly.

Scenario 2 — same agency, paid directly by a private family. The same HomeCare Staffing Agency bills a private family ₱45,000 per month for an identical live-in caregiver arrangement, but this time the family pays out of its own pocket, with no corporate benefits program involved.

Nothing is withheld in Scenario 2, and no BIR Form 2307 is issued, for the same reason a private household paying for its own domestic help directly isn’t a withholding agent — the identical logic covered in Do Household Employers Need to Withhold Tax on Kasambahay Wages?. HomeCare Staffing Agency still owes its own income tax and VAT or percentage tax on the ₱45,000 either way; the absence of a certificate in Scenario 2 doesn’t reduce the agency’s underlying tax liability, it only means the family never had a withholding obligation to document.

Frequently asked questions #

Does a private family need to withhold tax when it hires a caregiver or nanny directly? #

Generally no. A direct-hire caregiver or nanny working for a private household is an ordinary kasambahay employment relationship, and a private household is not engaged in trade or business through that arrangement, so it is not a BIR withholding agent on the caregiver’s wages.

What if the family instead pays a caregiver or nanny placement agency out of its own pocket? #

In most cases, still no withholding. Revenue Regulations No. 2-98, Section 2.57.3 constitutes an individual as a withholding agent only for payments connected to a trade or business. A private family paying a placement agency to find and manage household help, out of personal funds and unconnected to any business, is not engaged in trade or business with respect to that payment.

When does a corporate client have to withhold on a caregiver or nanny placement agency payment? #

When a company, rather than a private individual, pays the agency — for example, under an expatriate relocation package or an employee benefits program that arranges and funds a caregiver for a transferred executive’s household. A corporation is a withholding agent regardless of trade-or-business engagement under RR No. 2-98, Section 2.57.3(A), so its payment to the agency is subject to 2% expanded withholding tax.

Does the corporate client withhold on the agency’s full billing or just its placement or management fee? #

On the full billing. A caregiver or nanny placement agency functions like a general manpower or staffing agency, not a security agency, so it does not qualify for the narrow agency-fee-only carve-out under RMC No. 39-2007. The 2% expanded withholding tax applies to the agency’s entire invoice, including the portion that funds the caregiver’s own wages.

Summary #

Whether a caregiver or nanny placement payment gets withheld turns on who the payor is, not on what the agency does. A private family — whether hiring a caregiver directly or paying a placement agency out of pocket — generally isn’t a BIR withholding agent under RR No. 2-98, Section 2.57.3(B), the same conclusion reached in Do Household Employers Need to Withhold Tax on Kasambahay Wages?. A corporation paying that same agency, such as through an expatriate relocation or benefits program, is a withholding agent under Section 2.57.3(A) regardless of trade-or-business engagement, and withholds 2% EWT (ATC WC160, or WI160 for an individual-owned agency) on the agency’s full billing — wages included — under the same full-billing rule covered in BIR Form 2307 for Manpower and Staffing Agencies.