Year-End Compliance Countdown: Business Permit Renewal, 13th Month Pay and the BIR Close-Out
Christmas Eve to the end of January is one compliance window. 13th month pay, your 2027 business permit and the payroll close-out with the BIR — every date, what the law says, and what a miss costs.
Starlight Admin
The countdown, as of today
69days left
13th month pay released
96days left
Business permit renewed and tax paid
107days left
BIR 2316, 1604-C and alphalist
Year-end compliance in the Philippines lands in one tight window. Between Christmas Eve and the end of January, every employer releases 13th month pay, renews its business permit, and closes the payroll year with the BIR.
Treat them as one project and they are routine. Treat them as three separate surprises and one of them slips. Here is every date, what the law says, and what each costs if missed.
Why these deadlines collide
National law fixes both sides. Local business tax accrues on 1 January. Payroll closes on the calendar year. So the two land on top of each other, every year.
24 Dec13th month
20 JanPermit and tax
31 JanBIR close-out
Thirty-eight days, three agencies, one finance team. Plan it as a single project.
The business permit deadline and penalties
The Mayor's Permit runs on the Local Government Code of 1991 (RA 7160). Three sections set the clock and the cost.
Sec. 166
Accrual
Local taxes, fees and charges accrue on 1 January.
Sec. 167
Payment
Payable within the first 20 days of January — or of each quarter, if the LGU allows instalments.
Sec. 168
Penalties
A surcharge and monthly interest on anything paid late.
25%
maximum surcharge
2%
maximum interest a month
36
months of interest, at most
Those are ceilings. Each LGU sets its own actual rates by ordinance, so check your city's revenue code before you budget for a late renewal.
There is no national grace period. Any extension has to come from your LGU's own ordinance or executive order. Without a current permit, the LGU can also order the business closed.
Business permit renewal requirements
No single national checklist covers every LGU. This is the standard packet most cities start from.
The renewal packet
- Last year's Business or Mayor's Permit and official receipts
- Barangay Business Clearance for the business location
- Proof of last year's gross sales or receipts — ITR, AFS, or VAT or percentage tax returns
- Fire Safety Inspection Certificate from the BFP
- Sanitary permit, and an environmental clearance where it applies
- Updated SEC documents and latest GIS — or DTI registration for a sole proprietor
- Lease or land title, if the address changed or the lease was renewed
Operate in more than one city? Expect a separate checklist for each, and check every LGU's own portal or citizen's charter rather than assuming another city's rules apply.
Renewing online through eBOSS
Joint Memorandum Circular No. 01, s. 2021 directs LGUs to run a Business One Stop Shop and, where feasible, an electronic one: one form for new and renewing businesses, no notarisation, and online billing, payment and issuance.
3
working days
Simple
7
working days
Complex
20
working days
Highly technical
Those are the maximum processing times under the Ease of Doing Business Act (RA 11032), overseen by the Anti-Red Tape Authority(opens in a new tab). Where a renewal falls depends on how your LGU classifies it — a ceiling, not a same-day promise.
Adoption varies. Quezon City renews through QC E-Services and asks for a narrower set: a validated current-year receipt, the barangay clearance, last year's permit, and an authorisation if a representative files.
The math on January 20
A corporate permit renewal takes us 20–25 working days. That means the paperwork starts in December.
We remind you ahead of the deadline, assemble the packet, and manage the renewal with your LGU — for the main office, branches and warehouses.
13th month pay: who, how much, by when
1
12
The minimum under Presidential Decree 851: one-twelfth of the basic salary an employee earned in the calendar year. Owed to every rank-and-file employee with at least a month's service, however they are paid, by 24 December.
Covered
Rank-and-file staff, whatever their title or pay method — and a proportionate amount for anyone who left during the year.
Not covered by the mandate
Managerial employees. Many employers pay them one anyway, but the law does not require it.
₱90,000
tax-exempt, combined with other bonuses (TRAIN Law)
2
instalments allowed — half before school opens, the rest by 24 Dec
0
exemptions or deferrals DOLE grants on the deadline
Then the report. Employers file a compliance report on the DOLE online portal(opens in a new tab). For 2025 pay, Labor Advisory No. 16, s. 2025 set it at 15 January 2026. Expect a similar mid-January date for 2026 pay, and confirm it when DOLE issues the advisory.
Nothing in this window is hard. What goes wrong is three teams each assuming someone else started.
Contribution rates to load for 2027
Contributions are monthly, not annual. But the new year's tables have to be in payroll before the first 2027 run.
SSS
15%
10% employer · 5% employee
Salary credit ₱5,000–₱35,000
RA 11199 · SSS Circular 2024-006
PhilHealth
5%
2.5% employer · 2.5% employee
Basic salary ₱10,000 floor, ₱100,000 ceiling
RA 11223 (Universal Health Care)
Pag-IBIG
2% + 2%
Employer and employee
Up to a ₱10,000 fund salary — ₱200 a month each side
HDMF Circular 460
Verify before January. SSS and PhilHealth both reached the last step of their legislated schedules in 2025, and Pag-IBIG(opens in a new tab)'s rules date from February 2024. None is guaranteed for 2027 until each agency confirms it.
Closing the payroll year with the BIR
BIR Form 2316
To each employee
The year's compensation and tax withheld. Under substituted filing — most rank-and-file staff with one employer all year — you keep the signed copy instead of the employee filing a return.
Form 1604-C + alphalist
Filed with the BIR
Your annual information return on compensation, with the alphalist of employees, prepared and validated through the BIR's own tools.
The BIR(opens in a new tab) refines submission formats by Revenue Memorandum Circular most years. Check the current one before you finalise. Our tax compliance team files these every January, and the rest of the BIR year is on our Philippine tax calendar.
The full year-end countdown
13th month pay released
Every private employer with rank-and-file staff
Local business tax accrues
Every business with an LGU permit
13th month report to DOLE
Date set by the 2026 advisory — confirm when issued
Permit renewed, local tax paid
Every business with an LGU permit
BIR 2316 issued; 1604-C and alphalist filed
Every employer with compensation earners
Running underneath all of it: SSS, PhilHealth and Pag-IBIG on their usual monthly schedule. Still filing SEC reports too? See our SEC compliance calendar.
Starlight year-end compliance
One team for the whole window — 24 December to 31 January.
Permit renewal, 13th month and the BIR close-out, run as one project by one team, so nothing waits on someone else.
Business permit renewal
Main office, branches and warehouses — reminded, assembled and filed.
13th month computation and report
Computed for every rank-and-file employee, and reported to DOLE.
BIR Form 2316 and alphalist
Year-end annualisation, 2316 per employee, and the alphalist.
Contributions for 2027
SSS, PhilHealth and Pag-IBIG loaded and remitted on schedule.
0917 631 8876— Mondays to Fridays, from our Makati office.
Frequently asked questions
When is the deadline for business permit renewal in 2027?
20 January 2027. Under the Local Government Code, local business taxes accrue on 1 January and are payable within the first 20 days of the month, which is why LGUs treat 20 January as the cut-off for renewing without penalty. Check your own city or municipality's revenue code for any local variation.
What is the penalty for late business permit renewal?
The Local Government Code allows a surcharge of up to 25% of the tax due plus interest of up to 2% a month on the unpaid amount, for at most 36 months. The exact rates are set by each LGU's ordinance. An LGU can also issue a closure order against a business operating without a current permit.
What are the requirements for business permit renewal?
Typically the previous year's permit and receipts, a barangay business clearance, proof of the prior year's gross sales or receipts, a Fire Safety Inspection Certificate, a sanitary permit, and updated SEC or DTI documents — plus a lease or title if the address changed. Requirements differ by LGU, so confirm the list with yours.
Can I renew my business permit online?
In many cities, yes. Joint Memorandum Circular No. 01, s. 2021 directs LGUs to run a Business One Stop Shop and, where feasible, an electronic one (eBOSS) with a single application form, online payment and online issuance. Adoption varies — Quezon City, for example, renews through its own QC E-Services portal.
When must 13th month pay be released?
On or before 24 December. Employers may split it into two instalments — half before the opening of the school year and the rest by 24 December — but DOLE does not grant exemptions from or deferrals of the deadline.
Who is entitled to 13th month pay?
Every rank-and-file employee in the private sector who worked at least one month in the calendar year, whatever their position or how they are paid. The minimum is one-twelfth of the basic salary earned in the year. Managerial employees are outside the mandatory coverage, and employees who left during the year are owed a proportionate amount.
Is 13th month pay taxable?
Not up to PHP 90,000. Under the TRAIN Law, 13th month pay and other benefits of a similar nature are exempt from income tax up to PHP 90,000 combined. Anything above that is taxable compensation.
Do employers need to report 13th month pay to DOLE?
Yes, online through the DOLE reporting portal. For 2025 pay, Labor Advisory No. 16, s. 2025 set the deadline at 15 January 2026. The deadline for 2026 pay is set by that year's advisory, so confirm it once DOLE issues it.
When are BIR Form 2316 and Form 1604-C due?
Both by 31 January. Form 2316 goes to each employee, reflecting the year's compensation and tax withheld. Form 1604-C, the employer's annual information return, is filed with the BIR together with the alphalist of employees.
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