BIR Form 2307 for Locksmiths and Key-Duplication Services
A business — not a homeowner — that pays a locksmith for lock installation, rekeying, key duplication, or an emergency lockout service withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307, the same general-contractor bracket this series applies to other labor-heavy service calls, distinct from a straight retail purchase of locks or hardware.
This guide is part of the BIR Form 2307 series. It covers who withholds on a locksmith payment, how to tell a bundled service call from a retail hardware purchase, the applicable ATC codes, and a worked property-management rekeying example.
Generate Your Locksmith's BIR Form 2307 FREE →Who withholds on a locksmith payment? #
The obligation follows the same payor-status test this series applies to every business-service supplier: a corporation or business-connected individual withholds, a private homeowner generally does not. RR No. 2-98 sets the test this way:
“(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…”
— RR No. 2-98, Section 2.57.3(A)–(B)
A property management company paying a locksmith to rekey unit locks after a tenant turnover, or a warehouse operator paying for an emergency lockout call on its loading bay, is a withholding agent under clause (A) or (B). A homeowner paying a locksmith to fix a jammed bedroom door at their own residence falls outside the rule.
“REVENUE REGULATIONS NO. 11-2018 issued on March 15, 2018 amends certain provisions of Revenue Regulations (RR) No. 2-98, as amended, to implement further amendments introduced by Republic Act (RA) No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Law), relative to withholding of Income Tax.”
Service call (2%) vs. retail hardware purchase: telling labor from goods #
A locksmith’s service call and a retail purchase of locks or hardware are two different transactions, and only the service call falls in this 2% bracket. When a business pays a locksmith to install, rekey, repair, or duplicate keys on-site, labor is the dominant element of the charge, placing the payment under the general 2% contractor/business-services catch-all alongside other on-site service work this series covers, such as IT equipment repair and maintenance. When a business instead simply buys padlocks, cylinders, or key blanks in bulk from a locksmith’s shop — with no accompanying installation or repair labor — that is a purchase of goods, not a service.
| Transaction | Nature | Rate |
|---|---|---|
| Lock installation, rekeying, key duplication, lockout call | Service (labor-dominant) | 2% (ATC WI120 / WC120) |
| Bulk purchase of padlocks, cylinders, or hardware, no labor | Purchase of goods | 1%, only if payor is a designated Top Withholding Agent buying from a regular supplier |
The distinction matters because a purchase of goods is only withheld at 1% when the payor has been specifically designated by the BIR as a Top Withholding Agent buying from its regular suppliers — most businesses paying a one-off hardware bill have no withholding obligation on goods at all. A bundled service call, by contrast, is withheld at 2% regardless of Top Withholding Agent status, the same way this series treats a combined parts-and-labor repair invoice for IT equipment. A locksmith’s invoice that itemizes a replacement cylinder alongside installation labor is still treated as a single 2% service payment unless the hardware is billed and documented as a distinct retail sale.
Worked example: rekeying units after tenant turnover #
Harborview Property Management Inc. pays Keyline Locksmith Services ₱18,000 to rekey all unit locks in a residential building following a batch of tenant move-outs.
| Item | Amount |
|---|---|
| Rekeying service fee, labor and cylinders bundled (VAT-exclusive) | ₱18,000.00 |
| EWT withheld (2%, ATC WC120, assuming Keyline is incorporated) | ₱360.00 |
| VAT (12% on ₱18,000) | ₱2,160.00 |
| Net cash to Keyline (fee + VAT − EWT) | ₱19,800.00 |
Harborview withholds ₱360 when the invoice is booked and issues Keyline a BIR Form 2307 summarizing the fee and EWT withheld, ATC WC120. If Keyline instead operated as a sole proprietorship, Harborview would use ATC WI120 at the same 2% rate. Had Harborview separately placed a bulk order for padlocks with no installation labor from a different supplier, that purchase alone would generally carry no withholding obligation unless Harborview is itself a BIR-designated Top Withholding Agent.
Frequently asked questions #
Does a business have to withhold tax when paying a locksmith? #
Yes, if the payor is a corporation or a business-registered individual. A company paying a locksmith for lock installation, rekeying, key duplication, or an emergency lockout call is a withholding agent under RR No. 2-98, Section 2.57.3(A)-(B), and must withhold expanded withholding tax and issue BIR Form 2307.
What withholding tax rate applies to locksmith service fees? #
Locksmith service calls generally fall under the 2% general contractor/business-services bracket under RR No. 2-98, Section 2.57.2(E), as amended by RR No. 11-2018 — ATC WI120 for an individually run locksmith or WC120 for one organized as a corporation.
Is buying padlocks or hardware from a locksmith withheld the same way as a service call? #
No. A straight retail purchase of padlocks, cylinders, or other hardware with no accompanying labor is a purchase of goods, not a service payment, and is outside this 2% service bracket. It may instead fall under a 1% withholding rate if the payor is a BIR-designated Top Withholding Agent buying from a regular supplier; a service call where labor dominates stays at 2% regardless of Top Withholding Agent status.
Does a homeowner have to withhold tax when hiring a locksmith? #
No. A private individual hiring a locksmith to rekey or repair a lock at their own home, with no connection to a trade or business, is not a withholding agent under RR No. 2-98, Section 2.57.3, and does not withhold tax on the payment.
How is withholding computed when a locksmith is paid for a single emergency call-out? #
Withholding is based on whichever happens first — payment, the expense being booked in the payor’s records, or the invoice date — under RR No. 2-98, Section 2.57.4. A single emergency lockout call is withheld and documented at that point, the same timing rule that applies to a recurring maintenance contract.
Summary #
A locksmith’s service call — installation, rekeying, key duplication, or a lockout response — sits in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), separate from a retail hardware purchase with no labor attached. See BIR Form 2307 for Landscaping and Grounds Maintenance Contractors and BIR Form 2307 for IT Equipment Repair and Maintenance Contracts for how this series treats other labor-dominant service calls in the same 2% bracket.