Determining the Correct RDO Assignment: Employee Residence vs. Employer Address
Philippine Context — A Comprehensive Guide

1. Introduction

In the Philippine tax system, every taxpayer—individual or corporate—is assigned to a specific Revenue District Office (RDO) under the Bureau of Internal Revenue (BIR). This RDO has jurisdiction over the taxpayer’s registration, tax filings, and related transactions. For employees, the question often arises: Should an employee’s RDO be based on their personal residence or on their employer’s business address?

This article provides a comprehensive discussion of the legal and procedural foundations relating to RDO assignment for employees in the Philippines. It draws on the relevant provisions of the National Internal Revenue Code (NIRC), BIR regulations, and established practice.

2. The Legal Basis for RDO Assignment

National Internal Revenue Code (NIRC)
- Under Section 236 of the NIRC, all taxpayers are required to register with the BIR. This registration includes obtaining a Taxpayer Identification Number (TIN) and listing the appropriate address or location for tax purposes.
BIR Revenue Regulations and Issuances
- Revenue Memorandum Order (RMO) 37-2019, Revenue Regulations (RR) 7-2012, and earlier issuances provide detailed guidelines on how taxpayers (including individuals earning purely compensation income) should register with the BIR and how their RDO assignment is determined.
- BIR Forms (particularly BIR Form 1902 and BIR Form 1905) spell out the procedures on how individuals must register or transfer their RDO assignments.

3. General Rule for RDO Assignment of Employees

For employees earning purely compensation income, the traditional and still prevailing rule is:

The RDO of jurisdiction is the one where the employer’s place of business (main or branch office) is registered — not the employee’s personal residence.

Why the Employer’s RDO?

Withholding and Reporting Efficiency
Employers act as withholding agents. They are required to deduct withholding tax on compensation (WTC) from their employees’ salaries and remit this to the BIR. Centralizing employee records (e.g., alpha lists of employees, BIR Form 2316) under the employer’s RDO simplifies compliance.
Ease of Filing and Processing
- Annual and quarterly reports (including alpha listings, WTC remittances, and reconciliation statements) are filed in the employer’s RDO.
- Having the employees under the same RDO removes the burden of dealing with multiple district offices for a single employer.
Administrative Consistency
The BIR’s organizational structure is district-based. Each district office handles the accounts of taxpayers operating in its locality. When all compensation earners of a particular establishment are registered under one district office, it ensures coherence in monitoring, audit, and record-keeping.

4. Distinguishing Residence Address vs. Employer Address

Residence Address
- Typically relevant for self-employed professionals or single proprietors whose place of business is identical to their home address (e.g., a professional practicing at home or a micro business owner).
- Also relevant for mixed-income earners who have a separate trade/business at their residence aside from their employment.
Employer’s Business Address
- Relevant for employees whose income is purely compensation-based from a company, partnership, or any other entity registered with the BIR in a specific RDO.
- Even if an employee physically resides in a different city or province, the controlling factor for RDO assignment is still the employer’s tax registration address.

5. The Process of Registration and RDO Assignment

5.1 For Newly Hired Employees Without a TIN

Step 1: Accomplish BIR Form 1902 (Application for Registration for Individuals Earning Purely Compensation Income)
The employee must fill out Form 1902, entering personal details and indicating the employer’s RDO code.
Step 2: Submission to the RDO of the Employer’s Address
This can be done by the employer’s authorized HR or accounting officer who usually coordinates with the RDO where the employer is registered.
Step 3: Issuance of TIN and Registration
The RDO assigns a new TIN and the employee becomes officially registered under the same RDO as the employer.

5.2 For Employees with an Existing TIN Changing Employers

Step 1: Accomplish BIR Form 1905 (Application for Registration Information Update)
An employee who already has a TIN but transfers to a new employer whose business is registered in a different RDO must file BIR Form 1905 to request a “Transfer of Registration.”
Step 2: Employer or Employee Submits Form 1905 to the New RDO
Submission is made to the RDO having jurisdiction over the new employer’s address.
Step 3: RDO Transfer
The BIR updates its records, transferring the employee’s registration from the old RDO to the new RDO. Once completed, the employee’s tax records move to the new RDO, and the new employer can begin withholding taxes and reporting the employee’s compensation under the new district.

6. Special Situations

Multiple or Concurrent Employers
- If an employee works for multiple employers in different locations simultaneously, the BIR typically requires a single “primary” RDO registration (generally based on the principal employer’s address). The employee and employers must coordinate so that proper withholding tax and records are centralized.
Employer’s Change of Address
- If an employer relocates or changes its principal business address (and hence moves under a different RDO), the employees are likewise transferred. The HR/accounting department usually processes a mass RDO transfer for all affected employees, using BIR Form 1905.
Telecommuting or Remote Work
- Even if an employee works remotely and rarely goes to the employer’s physical office, the RDO on record is still that of the employer’s registered address. Telecommuting arrangements do not change the BIR’s standard rule on RDO assignments.
Overseas Filipino Workers (OFWs) and Non-Resident Citizens
- For OFWs or non-resident citizens earning purely foreign-sourced income, the registration is handled differently (often in the RDO that handles non-resident taxpayers). However, if at any point they become employed by a local Philippine company, the same rule applies (they transfer or register under the employer’s RDO).

7. Practical Implications and Compliance Tips

Check Your RDO Code Regularly
- Employees often overlook updating their RDO when they switch jobs. This can lead to complications in securing a Tax Clearance, transferring records, or applying for loans (banks sometimes require an updated BIR registration).
Keep HR Informed of Your TIN Status
- If you already have a TIN from a previous employer, inform the new employer. They will help facilitate the RDO transfer (if needed).
Avoid Multiple TINs
- It is illegal to possess more than one TIN. If you suspect you might have been issued multiple TINs by mistake in the past, coordinate immediately with the BIR and your employer to consolidate under the correct TIN.
Use BIR Form 1905 for Updates
- Whether you are changing employers, addresses, or personal information, BIR Form 1905 is the key document for updating BIR records and ensuring you are assigned to the correct RDO.
Maintain Accurate Personal and Employer Information
- Mismatched or outdated records in the BIR’s database can result in delays or penalties, especially if you need to secure your Income Tax Returns, Certificate of Withholding (BIR Form 2316), or other official documents.

8. Common Misconceptions

“I live far from my employer; I can choose my home RDO instead.”
- Incorrect. For purely compensation income earners, the rule is always that you register under the RDO that has jurisdiction over your employer’s address.
“My residence is in the province, so my TIN must remain in the provincial RDO.”
- Not if you are now employed in a different region under a different RDO. You must transfer your registration to your current employer’s RDO.
“Remote or work-from-home setups allow me to pick any RDO I want.”
- There is no such exemption for telecommuters. The standard practice still applies—employees go under their employer’s RDO.

9. Consequences of Incorrect RDO Assignment

Delayed or Rejected Filings
Submissions made to the wrong RDO may not be recognized, causing penalty assessments for late filing or remittance.
Difficulty in Availing of Government Services
Transactions such as applying for business permits, tax clearances, or even license renewals can be delayed if your records are with an RDO far from your actual employer.
Penalties and Compliance Issues
While the employer primarily bears the risk of incorrect withholding, employees also risk mismatch in their tax records, which can lead to audits or complications down the line (e.g., mismatch of WTC or other BIR forms).

10. Conclusion

In the Philippines, employees earning purely compensation income are assigned to the RDO where their employer is registered, not the personal or residential address of the employee. This policy ensures streamlined withholding tax compliance, accurate record-keeping, and consistency in BIR’s administration.

For employees changing jobs or addresses, staying compliant involves:

Verifying your existing TIN and RDO assignment,
Filing the necessary BIR forms (Form 1902 for initial registration, Form 1905 for transfers or updates), and
Coordinating closely with your employer’s HR or finance department.

By following these guidelines and understanding the underlying rules, taxpayers can avoid delays, penalties, and administrative headaches, ensuring their tax affairs are in good order under the correct RDO.

Important References and Further Reading

National Internal Revenue Code (NIRC), as amended
Revenue Memorandum Order (RMO) 37-2019
Revenue Regulations (RR) 7-2012
BIR Form 1902 – Application for Registration for Individuals Earning Purely Compensation Income
BIR Form 1905 – Application for Registration Information Update

Disclaimer: This article is for general information only and does not constitute legal advice. For specific cases or further guidance, consult a tax professional or coordinate directly with the BIR.