BIR Form 2307 for Pest Control and Waste Hauling Services: Recurring Contract Withholding

A business that pays a pest control company or a waste/junk hauling service — whether under a recurring monthly contract or a one-time service call — generally withholds 2% expanded withholding tax (EWT) under RR No. 2-98, Section 2.57.2(E), and issues BIR Form 2307. Because these are often ongoing retainer arrangements rather than one-off purchases, the timing question — which month’s withholding a given service call falls into — matters as much as the rate itself.

This guide is part of the BIR Form 2307 series. It covers who withholds on a pest control or waste hauling payment, the applicable ATC codes, how a recurring contract is withheld month by month, and a worked restaurant-chain service contract example.

Who withholds on a pest control or waste hauling 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 restaurant chain paying a pest control company for monthly extermination service across its branches, or a property management company paying a junk hauling service to clear construction debris, is a withholding agent under clause (A) or (B). A homeowner paying for a one-time termite treatment at their private residence falls outside the rule.

What EWT rate applies? #

Pest control and waste/junk hauling services are not named as their own separate line items in RR No. 2-98 — both fall under the same flat 2% general contractor/business-services catch-all covered in BIR Form 2307 for Contractors and Subcontractors, the bracket this series applies to security, janitorial, and similar recurring business-service suppliers.

A true pass-through cost stays outside this base. If a hauling company pays a landfill tipping fee or third-party disposal cost on the client’s behalf and re-bills it at cost, separately itemized from its own hauling fee, that reimbursed amount is not the hauler’s income — the same reimbursement principle this series covers in Do You Withhold Tax on Reimbursement of Out-of-Pocket Expenses Billed Separately From a Service Fee?

How a recurring monthly contract gets withheld #

Pest control and waste hauling are often retainer arrangements — a fixed monthly fee for scheduled service calls — rather than a single purchase, which raises a timing question this series addresses directly. Under RR No. 2-98, Section 2.57.4, as amended by RR No. 4-2024, the withholding obligation is triggered by whichever of actual payment, the payor’s own books recording or accruing the expense, or the seller’s supporting invoice comes first — it does not wait for cash to actually move. Applied to a recurring service contract, this generally means each month’s service fee is withheld as that month’s payment falls due, is paid, or is booked as an expense — not accumulated across the year and withheld once. See When Must You Withhold Tax for BIR Form 2307: At Payment or When the Expense Accrues? for the full mechanics of this timing rule.

Worked example: a restaurant chain’s pest control contract #

Golden Wok Restaurant Group Inc. contracts SafeGuard Pest Solutions Corp. for monthly pest control across its 8 branches, at a fixed ₱24,000 per month.

Golden Wok withholds ₱480 each month as the invoice is booked, remits it through BIR Form 0619-E monthly and BIR Form 1601-EQ quarterly, and issues SafeGuard Pest Solutions a BIR Form 2307 each quarter summing the cumulative service fees paid, ATC WC120, and total tax withheld for the period. Over a full year, that’s ₱288,000 in service fees and ₱5,760 in cumulative EWT reflected across four quarterly certificates, not one lump certificate issued at year-end.

Frequently asked questions #

Does a business have to withhold tax when paying a pest control or waste hauling company? #

Yes, if the payor is a corporation or a business-registered individual. A business paying a pest control company or a waste/junk hauling service for recurring or one-time service calls 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 pest control and waste hauling fees? #

Pest control and waste/junk hauling services 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 service provider or WC120 for one organized as a corporation.

How is withholding computed on a recurring monthly service contract? #

Withholding follows whichever happens first each period — payment, the expense being booked in the payor’s records, or the invoice date — under RR No. 2-98, Section 2.57.4 as amended by RR No. 4-2024. For a recurring pest control or waste hauling contract billed monthly, this generally means each month’s service fee is withheld in the month it’s paid, accrued, or invoiced, not accumulated and withheld once at year-end.

Does a homeowner paying for personal pest control at home need to withhold tax? #

No. Under RR No. 2-98, Section 2.57.3(B), withholding applies only to payments connected to a trade or business. A homeowner paying a pest control company to treat a personal residence is not a withholding agent and the pest control company does not receive a BIR Form 2307 for that payment.

Does disposal or dumping-fee reimbursement billed separately change the withholding base? #

Yes, if it’s a true pass-through. A landfill tipping fee or third-party disposal cost the hauling company pays on the client’s behalf and re-bills at cost, separately itemized from its own hauling service fee, is a reimbursement rather than income to the hauler and sits outside the withholding base — only the hauler’s own service fee is withheld.

Summary #

Pest control and waste/junk hauling services sit in the flat 2% general business-services bracket (ATC WI120/WC120) under RR No. 2-98, Section 2.57.2(E), the same bracket covering security and janitorial contractors. On a recurring monthly retainer, each month’s fee is withheld as it’s paid, accrued, or invoiced under the Section 2.57.4 timing rule, not lumped together at year-end. See BIR Form 2307 for Contractors and Subcontractors for the general 2% bracket this rate draws from, and When Must You Withhold Tax for BIR Form 2307: At Payment or When the Expense Accrues? for the full timing mechanics behind a recurring contract.