BIR Form 2307 for Pre-Need Plan Sales Agents: Why They're Not Withheld Like Insurance Agents

A pre-need company’s sales agents and counselors are often assumed to withhold the same way insurance agents do, since both are licensed and regulated by the same government body — the Insurance Commission — but that shared regulator does not carry over into BIR withholding tax treatment. Insurance agents and insurance adjusters sit in their own specific item under Revenue Regulations (RR) No. 2-98, withheld at 10%/15%. Pre-need sales agents and counselors are not covered by that item; their commissions instead fall under the general brokers-and-agents bracket under RR No. 11-2018, withheld at 5%/10%.

Why the insurance-agent mix-up happens #

Pre-need companies and insurance companies answer to the same regulator, the Insurance Commission, which creates a reasonable but mistaken assumption that their sales forces are also taxed alike. The Pre-Need Code of the Philippines (Republic Act No. 9829) places pre-need companies — not insurance companies — under that same commission’s authority. Its implementing rules describe the scope of that oversight plainly:

“All pre-need companies, as defined under these rules, shall be under the primary and exclusive supervision and regulation of the Insurance Commission.”

That provision governs how pre-need companies are licensed, capitalized, and supervised as a financial-services industry — it says nothing about BIR withholding tax categories, which are set separately under the National Internal Revenue Code and the BIR’s own revenue regulations. The Insurance Commission’s oversight role and the BIR’s withholding-rate schedule are two entirely separate systems that happen to both touch the same pre-need agent.

Why pre-need agents don’t fall under the insurance-agent ATC #

The insurance-agent withholding item in RR No. 2-98 is written specifically for commissions paid to insurance agents and insurance adjusters — a defined category tied to the Insurance Code’s licensing of insurance agents, not a general “anyone the Insurance Commission licenses” category. A pre-need sales agent or counselor is licensed under the Pre-Need Code, a separate statute with its own agent-licensing framework, not under the Insurance Code’s insurance-agent licensing provisions. Because the ATC item’s coverage follows the specific licensing category it names, a pre-need agent’s commission doesn’t automatically inherit the insurance-agent rate just because the two professions are adjacent and share a regulator.

Instead, a pre-need agent’s commission falls back to the general category this site has already covered for commissions and brokers: independent sales agents and representatives earning commissions on sales where title to what’s sold doesn’t pass through the agent, withheld at the standard individual professional/commission rate under RR No. 11-2018.

Rate comparison: pre-need agent vs insurance agent #

A pre-need company that mistakenly applies the insurance-agent rate to its sales force risks over-withholding at the wrong threshold and issuing a BIR Form 2307 with an ATC that doesn’t match the actual regulatory basis for the payment — a mismatch a sharp-eyed agent or a BIR examiner could flag.

Worked example: a pre-need counselor’s quarterly commission #

A pre-need company pays a sales counselor ₱90,000 in commissions for the quarter. The counselor has a valid sworn declaration on file, and her cumulative commissions from this company for the year remain well under ₱3,000,000.

• Gross commission: ₱90,000
• Creditable withholding tax withheld (5%, brokers-and-agents bracket): ₱4,500
• Net amount paid to the counselor: ₱85,500

The pre-need company issues BIR Form 2307 using ATC WI010, not the insurance-agent-specific WI070 — the correct basis for a pre-need agent’s commission under RR No. 11-2018.

Frequently asked questions #

Are pre-need plan sales agents withheld the same way as insurance agents? #

No. Insurance agents and insurance adjusters fall under their own specific creditable withholding tax item under Revenue Regulations No. 2-98 (10%/15% at a ₱720,000 threshold). Pre-need plan sales agents and counselors are not insurance agents under that specific item, so their commissions fall under the general brokers-and-agents bracket under Revenue Regulations No. 11-2018 instead (5%/10% at a ₱3,000,000 threshold).

Why do people assume pre-need agents are withheld like insurance agents? #

Because both pre-need companies and insurance companies are regulated by the same government agency, the Insurance Commission, under separate laws — the Insurance Code for insurers, and the Pre-Need Code (RA No. 9829) for pre-need companies. Sharing a regulator doesn’t mean sharing a BIR withholding tax category; the two remain distinct for tax purposes.

What withholding rate applies to a pre-need sales agent’s commission? #

An individual pre-need sales agent or counselor generally falls under the brokers-and-agents commission item in Revenue Regulations No. 11-2018: 5% if cumulative gross income from that pre-need company for the year does not exceed ₱3,000,000 and a valid sworn declaration is on file, or 10% otherwise.

Does the pre-need company itself withhold, or does the Insurance Commission handle tax matters? #

The pre-need company withholds. The Insurance Commission’s role is industry regulation and solvency oversight under the Pre-Need Code — it does not administer BIR withholding tax, which remains the pre-need company’s obligation as the payor of its agents’ commissions, following the ordinary BIR Form 2307 process.

Summary #

Pre-need and insurance companies share a regulator but not a BIR withholding tax category — pre-need sales agents fall under the general 5%/10% brokers-and-agents bracket under RR No. 11-2018, not the insurance-agent-specific 10%/15% item under RR No. 2-98. For related commission withholding, see BIR Form 2307 for Commissions and Brokers, BIR Form 2307 for Insurance Agents and Adjusters, and the BIR Form 2307 hub.