BIR Online Tools for Courier and Last-Mile Delivery Businesses

A courier or last-mile delivery company has its own payor-side withholding duties that are distinct from the better-known question of how a platform withholds on its individual drivers: a subcontracted rider-fleet operator or franchise branch falls under the 2% general contractor bracket, and a leased sorting warehouse falls under the 5% rental bracket. Neither depends on the courier company’s own common carrier or VAT status.

This guide is part of the site’s BIR Online Tools coverage and builds on BIR Form 2307 for Courier and Last-Mile Delivery Services, Do Food Delivery Apps Withhold Tax on Restaurant Payouts?, and BIR Form 2307 for Trucking and Cargo Hauling Companies. It covers the courier company’s own vendor-side withholding, warehouse rent, and a worked route-subcontract example.

A different question from platform-to-driver withholding #

The withholding question most often covered for courier and delivery businesses is how a platform withholds on the individual riders and drivers earning through its app — but a courier or last-mile delivery company has a second, separate withholding question as a business in its own right: what it owes when it subcontracts a rider-fleet operator or a franchise branch to run a route, and what it owes on a leased sorting facility. This guide covers that second question — the courier company acting as a payor toward other businesses, not a platform paying individual earners.

Subcontracted rider-fleet operators and franchise branches: the 2% contractor bracket #

A rider-fleet operator or franchise branch engaged on a contract basis to run a delivery route or coverage area for the courier company falls under the same 2% general contractor bracket that covers trucking, hauling, and forwarding contracts elsewhere on this site, using ATC WC120 for a corporate operator or WI120 for an individual one. RR No. 2-98’s “other contractors” clause under Section 2.57.2(E) specifically enumerates the kind of businesses this bracket covers, and a courier or last-mile delivery operation sits squarely within it:

“Operators of stevedoring, warehousing or forwarding establishments” — listed among “Other contractors” subject to creditable withholding tax under RR No. 2-98’s income payments to certain contractors.

BIR Form 2307 for Trucking and Cargo Hauling Companies covers the same 2% bracket for a transportation contractor once payments to the same hauler reach the regulation’s threshold — the operative principle is identical here: a dedicated route subcontract is a service contract, not a goods purchase or a simple equipment lease.

Sorting warehouse rental #

A sorting hub or warehouse leased from a corporate landlord is a payment for the continued use of real property, not a service fee, and draws the 5% rental bracket under Section 2.57.2(B) — ATC WC100 for a corporate landlord, WI100 for an individual one.

Worked example: QuickDash Logistics’ route subcontract and warehouse lease #

QuickDash Logistics subcontracts a dedicated delivery route to a corporate rider-fleet operator and leases a sorting warehouse from a separate corporate landlord. The figures are fictional.

QuickDash’s bookkeeper compiles both payees into one listing — name, TIN, amount, and ATC for each — and uploads it to the bulk BIR Form 2307 generator to produce both certificates in one batch, separate entirely from whatever withholding QuickDash’s own app may apply to its individual riders if it also runs a platform-style payout model.

Pre-filing checklist for a courier or last-mile delivery business #

1. Separate the two withholding directions — platform-to-individual-driver payouts (covered elsewhere on this site) versus the courier company’s own business-to-business vendor payments (covered here).
2. Classify a route subcontract as a 2% contractor service, not a goods purchase or a rental, unless the arrangement is genuinely a vehicle lease instead.
3. Separate warehouse rent from route-subcontract payments in the payee listing — rent uses WI100/WC100, not WI120/WC120.
4. Upload the full vendor-payee listing to the bulk BIR Form 2307 generator each period.

Frequently asked questions #

Is this the same withholding question covered for platform driver payouts elsewhere on this site? #

No — it’s the reverse side of a similar question. Dedicated posts on this site already cover how a ride-hailing or delivery platform withholds on the individual drivers and riders who earn through its app. This guide instead covers a courier or last-mile delivery company’s own duties as a payor when it subcontracts a rider-fleet operator or leases a warehouse — a business-to-business relationship, not a platform-to-individual payout.

What withholding rate applies to a subcontracted rider-fleet operator? #

A rider-fleet operator or franchise branch engaged on a contract basis to run a delivery route generally falls under the 2% general contractor bracket under RR No. 11-2018 — ATC WC120 for a corporate operator, WI120 for an individual one — the same bracket that covers trucking and hauling contracts elsewhere on this site.

Does a courier company withhold tax on its sorting warehouse rent? #

Yes, if it pays a landlord for the continued use of real property in connection with its business. Rent paid to a corporate landlord is withheld at 5% under ATC WC100; an individual landlord uses ATC WI100.

Does this withholding duty depend on whether the courier company is itself a common carrier subject to percentage tax? #

No. A courier company’s own common carrier’s percentage tax status (if applicable) is a separate tax on its own gross receipts from carriage. Its duty to withhold on a subcontracted operator or a landlord is a different obligation entirely, triggered by making those payments in connection with its trade or business, regardless of its own percentage tax or VAT registration.

Can BIR Online Tools generate certificates for several subcontracted operators from one upload? #

Yes. The bulk BIR Form 2307 generator takes a single payee listing — every subcontracted rider-fleet operator, franchise branch, or landlord, each with their own ATC code — and produces every certificate from that one upload.

Summary #

A courier or last-mile delivery company’s own withholding duties — distinct from the platform-to-driver question covered elsewhere on this site — run on subcontracted rider-fleet operators or franchise branches (2% general contractor) and on a leased sorting warehouse (5% rental). See BIR Form 2307 for Courier and Last-Mile Delivery Services and BIR Form 2307 for Trucking and Cargo Hauling Companies for the related payee-side detail.