BIR Form 2307 for Directors' Fees: Rates for Non-Employee Board Members

Fees paid to directors who are not employees of the company — and whose duties are confined to attending and participating in board meetings — are subject to creditable withholding tax at 5% or 10% under Revenue Regulations (RR) No. 11-2018, Section 2.57.2(A)(9). The company withholds at the applicable rate and issues BIR Form 2307 to the director as proof of the tax withheld.

This guide is part of the BIR Form 2307 series. It explains which board members fall under expanded withholding, how the sworn-declaration rule picks 5% versus 10%, how employee-directors differ (BIR Form 2316, not 2307), and a worked quarterly fee example.

Who is covered by directors’ fee withholding under RR No. 11-2018? #

RR No. 11-2018 places non-employee directors’ fees under the same Section 2.57.2(A) professional-fee cluster as other individual service fees, but only when two conditions both hold: the director is not an employee of the company paying the fee, and the director’s duties are confined to attendance at and participation in the meetings of the board of directors.

In practice, that usually means an independent or outside director who receives a board fee, per diem, or similar remuneration solely for board service — not a full-time officer or rank-and-file employee who also sits on the board.

Amounts that typically fall in this bucket include:

• Quarterly or annual board retainers paid to non-employee directors
• Per-meeting fees limited to board attendance and participation
• Related allowances treated as part of the directors’ fee under the same provision (when they are not separately reclassified)

If the person’s role goes beyond board attendance into day-to-day management as an employee, treat the payment under compensation rules instead — see the employee-director contrast below.

What is the withholding tax rate on non-employee directors’ fees? #

Non-employee directors’ fees follow the individual professional-fee rate structure in RR No. 11-2018: 5% when current-year gross income does not exceed ₱3,000,000 and the required sworn declaration plus Certificate of Registration (COR) are on file; otherwise 10%.

RR No. 11-2018 requires individual payees whose gross receipts/sales for the year will not exceed ₱3,000,000 to submit a sworn declaration (Annex “B-1”), together with a copy of their COR, to each income payor not later than January 15 of each year or at least prior to the initial payment. Without that package on file, the company should withhold at 10%.

This is the same ₱3,000,000 sworn-declaration logic used for other individual professional fees — see BIR Form 2307 for Professional Fees for the parallel rate table and ATC pattern used on consultant-type payments.

Employee-directors: compensation withholding and BIR Form 2316, not BIR Form 2307 #

An employee who also serves as a director is not covered by the non-employee directors’ fee rule in Section 2.57.2(A)(9). Board-related pay that is part of employment compensation is withheld under the compensation withholding tables, and the year-end certificate is BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) — do not issue BIR Form 2307 for that compensation stream.

Mixing the two forms is a common board-pay error: putting an employee-director’s board stipend on BIR Form 2307 misstates the tax type and can fail to match the company’s payroll and annual compensation alphalist. Fringe benefits granted to supervisory or managerial employees (including some employee-directors) may also trigger separate fringe benefits tax remittance on BIR Form 1603-Q — see Fringe Benefits Tax and BIR Form 1603-Q when the benefit is not pure board-meeting fees.

Which ATC goes on the directors’ fee BIR Form 2307? #

Use the Alphanumeric Tax Code (ATC) prescribed for directors’ fees in the current Alphalist/ATC table for the 5% or 10% rate you actually withheld. RR No. 11-2018 states the coverage and rates for non-employee directors’ fees; it does not replace your alphalist lookup for the exact code string.

Do not reuse a professional-fee ATC from a consultant engagement (for example WI010/WI011) just because the percentage looks the same — payment category and ATC must match. For how ATCs work on certificates generally, see What Is an ATC and How to Find the Right One for BIR Form 2307.

When must BIR Form 2307 be issued for directors’ fees? #

BIR Form 2307 is the Certificate of Creditable Tax Withheld at Source for the directors’ fee. Under the certificate rules in Revenue Regulations No. 2-98 as amended (including by RR No. 11-2018), the payor issues the prescribed statement within twenty (20) days from the close of the quarter, showing the income payments and tax withheld — and, upon the payee’s request, must furnish the statement simultaneously with the income payment.

The company also remits the withheld tax through the applicable expanded withholding returns (commonly BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly) and reports the payee on its Quarterly Alphalist of Payees.

Worked example: ₱50,000 quarterly board fee #

Suppose a corporation pays an independent (non-employee) director a ₱50,000 quarterly board fee for attending and participating in board meetings only.

Scenario A — sworn declaration + COR on file; gross income for the year ≤ ₱3,000,000

The BIR Form 2307 shows ₱50,000 as the income payment, the directors’-fee ATC from the current alphalist table for the 5% tier, and ₱2,500 as tax withheld.

Scenario B — no sworn declaration on file (or gross income already over ₱3,000,000)

Same board fee, different certificate: the withheld amount doubles because the 10% default applies. If the same ₱50,000 were instead paid to an employee-director as compensation, the company would withhold under the compensation tables and reflect the amount on BIR Form 2316 — not on BIR Form 2307.

Frequently asked questions #

What withholding tax rate applies to directors’ fees for non-employee board members? #

Under Revenue Regulations No. 11-2018, fees of directors who are not employees of the company paying such fees, and whose duties are confined to attendance at and participation in board meetings, follow the same individual professional-fee structure: 5% if current-year gross income does not exceed ₱3,000,000 and a sworn declaration plus Certificate of Registration are on file, or 10% otherwise.

Do employee-directors get BIR Form 2307 for board fees? #

No. When a director is also an employee of the company, board-related compensation is generally treated under compensation withholding, and the certificate issued is BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld), not BIR Form 2307.

When must the company issue BIR Form 2307 for a non-employee director’s fee? #

The company must issue BIR Form 2307 as the Certificate of Creditable Tax Withheld at Source within twenty (20) days after the close of the quarter, or upon the payee’s request together with the income payment, under the certificate rules in Revenue Regulations No. 2-98 as amended by RR No. 11-2018.

What sworn declaration is needed for the 5% rate on directors’ fees? #

An individual non-employee director claiming the 5% rate must submit an Income Payee’s Sworn Declaration of Gross Receipts/Sales (Annex B-1 under RR No. 11-2018), together with a copy of their BIR Certificate of Registration, to the company not later than January 15 of each year or before the first payment of the fee.

Which ATC code should appear on BIR Form 2307 for directors’ fees? #

Use the Alphanumeric Tax Code (ATC) prescribed for directors’ fees in the current Alphalist/ATC table that matches the 5% or 10% rate you applied. RR No. 11-2018 sets the rates and coverage for non-employee directors’ fees; confirm the exact code against your current alphalist lookup rather than guessing from a similar professional-fee code.

Summary #

Non-employee directors whose duties are limited to board meetings are withheld at 5% or 10% under RR No. 11-2018 Section 2.57.2(A)(9), with BIR Form 2307 issued within 20 days after quarter close (or on request with payment). Employee-directors stay on compensation withholding and BIR Form 2316. Keep the sworn declaration on file before the first payment if the director qualifies for 5%, and select the directors’-fee ATC from the current alphalist table rather than borrowing a consultant code. For related guides, see What Is BIR Form 2307 and BIR Form 2307 for Professional Fees.