BIR Form 2307 for Commissions and Brokers: Rates, ATC Codes, and a Worked Example
Commissions paid to certain brokers, agents, and sales representatives are subject to the same expanded withholding tax (EWT) rate structure as professional fees under Revenue Regulations (RR) No. 11-2018: 5% or 10% for individual payees (with the ₱3,000,000 sworn-declaration rule), and the parallel corporate tiers where a non-individual is paid. The payor withholds the tax and issues BIR Form 2307 — typically with ATC WI010 (5%) or WI011 (10%) for individuals — so the agent can claim the amount as a tax credit.
This guide is part of the BIR Form 2307 series. It separates the brokers-and-agents item from the sales-representative item in RR No. 11-2018, notes where licensed real estate brokers sit, and walks through an ₱80,000 commission example.
Issue Commission BIR Form 2307 FREE →Which commission payments does RR No. 11-2018 cover? #
RR No. 11-2018 splits commission-type payments into two related categories that share the professional-fee rate structure. Both still require BIR Form 2307 when tax is withheld.
(10) Income payments to certain brokers and agents — on gross commissions of:
- Customs, insurance, stock, immigration, and commercial brokers
- Fees of agents of professional entertainers
- Real estate service practitioners (RESPs) — consultants, appraisers, and brokers — who failed or did not take the PRC Real Estate Service licensure examination and are not registered with the Real Estate Service
(11) Commissions of independent and/or exclusive sales representatives and marketing agents — on gross commissions, rebates, discounts, and similar considerations paid to independent or exclusive sales representatives, marketing agents, and sub-agents — including multilevel marketing companies — on direct selling or similar arrangements where there is no transfer of title over the goods from the seller to the agent.
Licensed real estate brokers (and other RESPs who completed PRC licensure and registration) are listed instead under the professional and talent fees category of RR No. 11-2018. They still face the 5%/10% individual structure, but they are classified as professionals — see BIR Form 2307 for Professional Fees.
What rates and ATC codes apply? #
Individual commission payees use 5% (WI010) or 10% (WI011); the sworn declaration decides which tier applies. Under RR No. 11-2018, an individual whose gross receipts/sales for the taxable year will not exceed ₱3,000,000 must submit a sworn declaration (Annex B-1 or B-2, as applicable) together with a copy of their Certificate of Registration to each income payor — not later than January 15 of each year, or at least before the initial commission payment — to be subject to 5%. The 10% rate applies if no declaration is provided, or if income exceeds ₱3,000,000 despite a declaration.
| Payee type | Condition | Rate | Typical ATC |
|---|---|---|---|
| Individual | Gross income ≤ ₱3,000,000, sworn declaration + COR on file, non-VAT as required | 5% | WI010 |
| Individual | Gross income > ₱3,000,000, VAT-registered where higher rate applies, or no sworn declaration | 10% | WI011 |
| Corporation / non-individual | Gross income ≤ ₱720,000 (with sworn statement) | 10% | WC010 |
| Corporation / non-individual | Gross income > ₱720,000, or no sworn statement | 15% | WC011 |
These are the same ATC family used for professional fees. Confirm the payment category in your alphalist narrative, but do not invent a separate “commission-only” ATC — see the ATC codes guide.
Worked example: ₱80,000 sales commission at 5% #
An individual sales representative with a sworn declaration on file who earns an ₱80,000 commission is withheld ₱4,000 at 5% under ATC WI010, and the company issues BIR Form 2307 for that amount.
A consumer-goods distributor pays Maria, an independent exclusive sales representative, a commission of ₱80,000 for the month. Maria submitted her sworn declaration and COR copy at the start of the year confirming estimated gross income will not exceed ₱3,000,000 and that she is non-VAT registered. ATC WI010 at 5% applies:
| Item | Amount |
|---|---|
| Gross sales commission | ₱80,000.00 |
| EWT withheld (5%, ATC WI010) | ₱4,000.00 |
| Net amount paid to representative | ₱76,000.00 |
The distributor remits the ₱4,000 through its EWT returns, reports Maria on the QAP, and issues BIR Form 2307 showing ₱80,000 income payment, ATC WI010, and ₱4,000 tax withheld. Maria claims the ₱4,000 as CWT on her annual income tax return.
If Maria had not filed a sworn declaration, the same ₱80,000 would be withheld at 10% (₱8,000) under ATC WI011 instead.
Frequently asked questions #
What is the withholding tax rate on commissions paid to brokers and sales agents? #
For individual brokers, agents, and independent or exclusive sales representatives, the expanded withholding tax rate is 5% if gross income for the current year does not exceed ₱3,000,000 and a sworn declaration (with COR) is on file, or 10% if gross income exceeds ₱3,000,000, the payee is VAT-registered where that triggers the higher rate, or no valid sworn declaration is on file, under Revenue Regulations No. 11-2018.
Which ATC codes apply to commission payments on BIR Form 2307? #
Individual commission payees under the broker/agent and sales-representative categories generally use ATC WI010 at 5% or WI011 at 10% — the same alphanumeric codes used for professional and talent fees under RR No. 11-2018. Corporate payees use the corresponding WC010 (10%) or WC011 (15%) structure where the non-individual thresholds apply.
Are licensed real estate brokers withheld as brokers or as professionals? #
Licensed real estate service practitioners (consultants, appraisers, and brokers) who passed the PRC licensure examination and are registered with the Real Estate Service fall under the professional/talent fees category in RR No. 11-2018, not the separate brokers-and-agents item that covers unlicensed RESPs. The rate structure is still 5%/10% for individuals, but the regulatory bucket is professional fees.
Do multilevel marketing commissions require BIR Form 2307? #
Yes. RR No. 11-2018 expressly includes commissions, rebates, discounts, and similar considerations paid to independent or exclusive sales representatives and marketing agents — including multilevel marketing companies — on direct-selling arrangements where title to the goods does not transfer to the agent. The payor withholds at the applicable rate and issues BIR Form 2307.
What happens if a sales agent has no sworn declaration on file? #
Without a valid Income Payee’s Sworn Declaration of Gross Receipts/Sales and a copy of the Certificate of Registration on file, the withholding agent should apply the higher 10% rate for an individual payee rather than 5%, under RR No. 11-2018. The agent then reflects that higher rate and the matching ATC (typically WI011) on BIR Form 2307.
Summary #
Broker, agent, and sales-representative commissions under RR No. 11-2018 follow the 5%/10% individual EWT structure (and corporate 10%/15% tiers), with WI010/WI011 on BIR Form 2307 when the payee is an individual. Keep sworn declarations on file before applying 5%, treat licensed real estate brokers as professionals, and do not confuse these payments with the flat 2% contractor rate. For the parallel professional-fee rules, see BIR Form 2307 for Professional Fees and What Is BIR Form 2307.