Last Updated on June 11, 2020 by Marie Bautista
Are you a small business owner or an employee affected by the quarantine brought about by the Covid-19 pandemic?
Due to the Covid-19 pandemic, the government has implemented enhanced community quarantine (ECQ) in Luzon and other areas in the Philippines.
However, the ECQ has led to significant hardships among businesses.
Read: Frequently Asked Questions on the Small Business Wage Subsidy Program
To help affected small businesses, the Small Business Wage Subsidy (SBWS) was one of the measures proposed under the Small Business Relief Program (SBRP).
Under the SBWS, employees of small business employers shall be given a wage subsidy of PHP5,000 to PHP8,000 based on the regional minimum wage for up to two (2) months covered by the ECQ period.
This will cover about 1.5 million employers with 3.4 million employees, and the total estimated cost is PHP51 Billion.
Eligibility Criteria for Business
There are two (2) eligibility criteria that must be both met:
1. Size of business
Small businesses, whether a corporation, partnership, or sole proprietorship,
except those registered under the Large Taxpayer Service (LTS).
2. ECQ impact
Small businesses under Category A (non-essentials) and Category B (quasiessentials).
a. Category A (non-essentials) refers to small businesses that are forced to close down during the ECQ period. (i.e. Malls, retail shops, etc.)
b. Category B (quasi-essentials) refers to small businesses that are allowed to operate a skeleton force during the ECQ period. (i.e. BPO, non-food manufacturing, etc.)
1. Employers in LGUs where other forms of quarantine are in place may also qualify.
2. The pre-qualification conducted by the BIR does not immediately entitle the small business employers and their employees to the SBWS Program.
Those who meet the above criteria and complied with the following shall be given priority:
BIR – The small business must be BIR-registered and actively complying with tax obligations during the past three (3) years, up to January 2020.
SSS – The small business must be SSS registered and have paid SSS contributions for the past three years up to January 2020 (the last recorded contribution).
Eligibility criteria for employees will be determined by SSS, not by BIR.
Wage Subsidy Amount
1. All eligible employees of eligible small businesses shall be given a wage subsidy of up to PHP8,000 per month (depending on their region of work) for up to 2 months, depending on the extent of the ECQ.
2. The subsidy amount varies per region and is generally aligned with the emergency subsidy for the informal sector, except that PHP8,000 per month is estimated for all eligible workers in NCR and Regions III and IV-A.
The reason for this is that there are many workers who live in one region and work in another region.
3. Pursuant to Section 4(z) of RA #11469, the cash subsidy given to salaried income earners under the SBWS program shall not be considered as gross income and shall not form part of the taxable income of the taxpayer.
Conditions to Avail
1. Small businesses must maintain the employment status of all eligible employee beneficiaries before the ECQ and throughout the SBWS period. Non-compliance with this condition shall result in the employer refunding to the government the wage subsidy amount.
2. Employees cannot resign during the ECQ period.
Procedures for BIR
1. BIR determines the eligible employer based on the above criteria, and generates the prequalified small business employer list.
2. BIR notifies pre-qualified small business employers through a list posted in the BIR website or through email when available.
The posted list and email shall include an alphanumeric passcode that will allow the employer to submit an application on behalf of their employees for the SBWS at the SSS.
3. Each RDO shall also send a notification to each eligible employer via email to inform them that they are pre-qualified for the SBWS.
4. BIR shall report to the SBWS Program Task Force the progress of notifying employers and queries or issues raised by taxpayers, without violating data privacy rules. For this purpose, each RDO thru their Regional Director shall submit a summary report to the Employer Notification and Monitoring Committee.
5. Eligible employers will now apply online with SSS through their My.SSS account, and use the unique 12-digit alphanumeric passcode and employer TIN to enter the SBWS page.
6. Employers who satisfy the two (2) criteria but not included in the pre-qualified BIR list may file a grievance complaint.
7. For BIR queries and requests for pre-qualification, employers may send an email to: SBWS_BIRquery@bir.gov.ph. Queries & requests for pre-qualification must be acted upon and resolved immediately.
For queries on other issues (non-prequalification), queries may be sent to
SBWSQueries@sss.gov.ph (SSS) or the SBWS Program Task Force.
April 16 to May 8, 2020
Target Payout Dates
1. First tranche: May 1 to 15, 2020
2. Second tranche: May 16 to 31, 2020
Note: Above schedule may change due to ECQ timing
Impact on DOLE Program
1. Once the SBWS is implemented, DOLE’s COVID-19 Adjustment Measures Program (CAMP), where employers apply for a one-time subsidy for each affected employee in the amount of PHP5,000, will be discontinued in May, except for OFWs.
2. DOLE CAMP beneficiaries who already availed of the PHP5,000 subsidy will no longer qualify in
the second tranche.