--- title: "BIR Form 2316 Substituted Filing: When to Tick or Check the Box?" --- [Skip to content](https://guide.sprout.ph/bir-form-2316-substituted-filing-when-to-tick-or-check-the-box#main-content) [![Sprout Logo-3](https://guide.sprout.ph/hs-fs/hubfs/Sprout%20Logo-3.png?width=200&height=78&name=Sprout%20Logo-3.png)](https://guide.sprout.ph/?hsLang=en) Open main navigation Close main navigation How can we help you? - There are no suggestions because the search field is empty. 1. [Sprout](https://guide.sprout.ph/?hsLang=en) 2. [Sprout Payroll](https://guide.sprout.ph/sprout-payroll?hsLang=en) 3. [BIR Forms](https://guide.sprout.ph/sprout-payroll?hsLang=en#bir-forms) # BIR Form 2316 Substituted Filing: When to Tick or Check the Box? Properly tagging **BIR Form 2316** during employee clearance ensures accurate tax compliance for both your company and your existingexiting staff. This guide breaks down exactly when an employee qualifies and when HR or Payroll administrators should check the **Substituted Filing** option in Sprout Payroll. **Qualification Criteria** Tick the **Substituted Filing** box **ONLY** if the employee satisfies **ALL** of the following BIR conditions for the calendar year: ![](https://guide.sprout.ph/hs-fs/hubfs/undefined-Nov-13-2026-06-08-43-2354-AM.png?width=227&height=117&name=undefined-Nov-13-2026-06-08-43-2354-AM.png) 1. **Purely Compensation Income:** Earns income strictly from employment (no business or freelance work). 2. **Single Employer:** Had **only one employer** in the Philippines for the entire calendar year. 3. **Correct Withholding:** Income tax due was calculated precisely upon tax annualization (TaxDue=TaxWithheld). 4. **Employer Compliance:** The company files BIR Form 1604-C along with the list of qualified employees. **When to Check for Resigned Employees** For an employee separating within the year (e.g., effective September 18, 2026): - **CHECK the box (/):** If your company was their **only** employer during the entire calendar year AND they will **not** join another company or engage in business before December 31. - **Leave UNCHECKED (X):** If they had a previous employer earlier in the year OR will transfer to a new employer/start a business later in the same calendar year. **Quick Reference Summary** | **Employee Situation** | **BIR Form 2316 Action** | | --- | --- | | **Only 1 employer all year + No new employment in 2026** | **CHECK Box** (/) | | **Transfers to a new employer within the same year** | **Uncheck Box** (X) | | **Had a prior employer earlier in the same year** | **Uncheck Box** (X) | When issuing BIR Form 2316 as part of an exit package, confirm the employee's re-employment plans for the rest of the year. If uncertain whether a separated employee will take on a new job before December 31, **leave the box unchecked**. This enables their next employer to consolidate their annual income correctly or allows the employee to file BIR Form 1700 independently, keeping both parties fully compliant. 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