Two months ago, I read in the news that two (2) restaurant establishments were sued for violation of Republic Act 9994, also known as the Expanded Senior Citizens Act of 2010, because they denied giving the complainant 20% senior citizen discount and VAT exemption. This news prompted me to write this article.
In this article, I will share with you how to properly compute the VAT Exemption, 20% senior citizen discount and amount collectible from your senior citizen customers.
3 Steps in Computing Amount Billable to Senior Citizen
1.) Determine the amount of VAT Exempt Sale
A senior citizen is exempted from paying Value-Added Tax (VAT). As such, you need to deduct the amount of VAT from the selling price. Here’s how to compute the VAT Exempt Sales to senior citizen:
Selling Price: P1,000.00
VAT Rate: 12%
Formula:
VAT Exempt Sales = Selling Price ÷ 1.12
Computation:
P1,000.00 ÷ 1.12 = P892.86
Note: This applies only if you’re company is VAT-registered. If you are NON-VAT registered, you can skip this step. The whole selling price will be considered VAT exempt sale.
2.) Deduct the 20% discount
The 20% senior citizen discount will be computed from the VAT Exempt Sale. Here’s how to compute for the discount:
Formula:
Senior Citizen Discount = VAT Exempt Sale x 20%
Computation:
P892.86 x 0.20 = P178.57
3.) Compute the billable amount
Once you’ve figured the VAT Exempt Sale and the senior citizen discount, you may now compute the amount billable or collectible to senior citizen. Here’s how:
Formula:
Amount Collectible = VAT Exempt Sale – Senior Citizen Discount
Computation:
P892.86 – P178.57 = P714.29
Thanks for sharing this info. I found this very helpful since I’m the one buying my lola’s meds.
We are glad to hear it has helped you. thank you for leaving a comment.
Hi,
May I ask what is the Definition of 1.12 , i was just confused where 1.12 came from on the Formula .
Your immediate response is highly appreciated
Hi Max, it means that the Sale Price of P1,000.00 is inclusive of VAT. To get the Sales net of vat, you need to remove the VAT by dividing 1.12 (112%). Here’s an illustration:
If Sales, net of VAT = 100%
VAT = 12%
Sales, gross of VAT = 112% or 1.12
Hope this helps.
What if they comes in groups or availed a room good for two with only one senior citizen?
of course if his companion is senior citizen automatically he can avail a stated discount but if he/she is not senior citizen he/she can not avail that stated privilege.
Hi, only a portion of the senior usage is computed.
Remember that Senior discount was passed for the senior privileges only.
50% senior
50% regular
selling Price 1000
Vat exempt : 892.86
Vat 12% : 107.14
Amount collectible: 803.53
To simplify (let us compute by the portion)
A. REGULAR Portion Selling Price(50% of 1000)=500
Vat exempt : 446.43
Vat 12% : 53.57
amount collectible: P500
B: SENIOR Portion Selling Price(50% of 1000)=500
Vat exempt : 446.43
Vat 12% : 53.57 (0 since vat exempt)
senior discount (vat exemptx20%)=89.31
Amount collectible: (446.43-89.31): 357.1
I do think… that they can both avail the discount. as long as it is under the senior citizen’s name.
when a family buys food in a restaurant, once they presented the OSCA ID, all of them will benefit. they can order a bucket with full discount. no questions asked.. hindi naman kayang ubusin ng oldies ang isang bucket meal. haha
I went to a dentist today. They only gave me 8% senior discount. I insisted it should be as you have illustrated above. They told me they still have to pay VAT so they only give 8%.
Are they justified legally?
Good day Ma’am!
Thanks for sharing your article. This help for us how to properly compute senior citizen discount and vat exempt sale.
I have some question in discount percentage. How to compute discount percentage? Is it computed from Vatable Sales or Gross Sales?
Example:
Gross Price = P1,000.00
Discount = 30%
1. Discount 30% computed from Gross Price.
P1,000.00 x 30% = P300.00
2. Discount 30% computed from Vatable Sales.
P1,000.00 / 1.12 = P892.86 – compute Vatable sales
P892.86 x 30% = P267.86 – compute 30% for discount
In my (2) computation example which is correct that can applied to restaurant?
hello, where can i see a sample receipt of this. thank you
are they entitle for Sc discount for Alcohol drinks like
beer, liquors cigarets?
thank you
Several restaurants in Leveriza , Pasay Do not honor senior citizens card . They are – Wo-Wo chinese restaurant in Asiawealth Tower , Ground flr – 1836 , Leveriza , Vito Cruz , Pasay. Also nearby is 88 restaurant owned by a certain Mommy Rose and some korean restaurants near Wesleyan College .
OSCA President of our barangay asked senior citizens of our barangay to pay 100 pesos yearly for a senior citizen to be called an ACTIVE SENIOR?? and if you dont pay, you are not entitled to the benefits like the death benefits?? is it right that they should pay the amount…
also, there are lots of indigent senior citizens but no one receives the montly 500pesos from the government.
Hi!, just want to know of the consequences if you give a discount less what
they (senior citizens) should get? Where do we report these people who give such discounts? Because I know one supervisor in a restaurant who lessens the discount by discount exempting other items in order to have a bigger sale and short-discounting the senior citizen. I just don’t know what their admin thinks or do regarding these matter. Thanks a lot.
on apartel rentals
given different scenarios, how do we compute for senior citizens discount?
1. two (2) or more Seniors with ID check-in in one room?
2. two (2) non-senior and one(1) senior check-in in one room?
Do restaurants, drugstores, etc. get reimbursed by the government for providing the Senior Citizen discount? What if the establishment’s profit margin is less than 20%? These establishments LOSE money on Seniors, or don’t they?
I bought 1 kilo of lechon. One kilo of lechon is Php500.00. The owner gave me 20% based from 1/4 kilo. They said that only 1/4 kilo of lechon can a senior citizen eat. Is this the proper computation. Need clarification. Thanks.
Very Helpful! Thank you :)))
How does the senior citizen discount apply to booking of hotel rooms?
Most rooms are good for two,. does this mean, the room rate shall be divided by 2 before applying the discount?
Thanks!
Are Senior Citizen Cards of other countries ex. AUSTRIA, applicable on the Phils? Will they (Seniors) also receive the same privileges/discounts accorded to Filipinos while vacationing here?
What is the consequence if a senior citizen is denied of the 20% discount by Red Ribbon Bake shop. The manager insisted that it only applies to breads not baked bread. He specified that Cakes are baked breads so 20% discount does’nt apply. All breads are baked is it not?and clealy,cakes are breads., Correct me if I’m wrong..The manager is a very good protector/ employee of the company but he is doing it the wrong way,or he is just too lazy to do the proper procedures in doing the processes required. I think Red Ribbon a giant income earning company should be concerned about this and impose proper actions..Hello DEPT.OF TRADE AND INDUSTRY.(DTI).
ask ko lang po, kumain po ako sa chinese noodle house somewhere near metro medical center in metro manila they charge me 120.00 i should my senior card and they deduct 10.00 of my bill tama po ba ito ? , the store do not issue receipt if you do not ask unlike the jollibee or mc donald it is automatic . salamat po
I think you have to qualify to avoid misleading our beloved senior citizens. Senior citizens are not always exempt from VAT. In fact, they are subject to VAT, save for specific purchases mentioned in the law.
Wooww..thank you so much for this information..truly a big help to me also since im the one buying meds for my father,,not all places (in general) are following on this senior citizen discount and vat exemptions..specially in the provinces..so i bought meds in the city..
Hi,
For non-vat establishments, what if a specific item or food (for example) once a senior discount of 20% is granted will incur a loss on the side of the seller? Can establishments limit the food/goods allowed for senior discounts? Thanks.
I thought 12% is 0.12..i’m a little confused here..
I’m a member of Golds’ Gym. Can I avail of my senior citizen’s discount for my annual membership?
Can I avail of my 20% discount for my membership to Gold’s Gym?
what if a certain hotel just give 20% and denied giving 12% in senior citizen total bill.
good day, bumili ako ng lozartan para sa lola ko 30pcs sna.. kaso sabi nung sa the generics 7pcs lng daw ang pwde,,,hnanapan ako ng reseta tpos nung may maipresent ako and id.. 7pcs lang daw pwde.. gnito po ba tlga??
Hi,
This is very helpful. Is the 20% discount applicable to all establishments? We had an experience today, my father bought some goods in a supermarket but he was given only 5% discount and they said that he availed the max limit per day or was it per week which is 1,300 pesos. The amount he paid was 2,345 and his discount was only 65pesos, the 65pesos was a discount pertaining to the 1,300 pesos limit so he has 0 balance already. Im quite confused. Hope you could help me on this one. Thank you
Can a senior get a double discount? For example if something is at discounted price, like a hotel room, can the citizen avail of the 20% on top of the already discounted price?
Hi, paano naman po dun sa grocery items na 5% yung binibigay. May vat exempt din po ba dun?
Naencounter ko po kasi today sa isang grocery dito sa muzon san jose del monte bulacan na dinuro duro at pinagsisigawan ako ng may ari dahil nirereklamo namin yung pagbibigay nila ng senior citizen discount.
Sana mabigyan niyo ko ng information kung saan at paano kagrereklamo sa ganoong mga business at sa pagcocompute na din. Salamat ng marami.
Sir,
If a senior citizen orders food in a restaurant by phone, is he entitled to a discount ?
Usually restaurants refuses to give a discount.
May I ask your opinion.
Hi! I’ m in the food business . How will i come up with the discounts if:
Total bill is 5000.00
No. Of pax is 10 with 4 senior citizens? Thanks!
Seller: “Can I see your ID please?”
Senior Citizen: “Over the Phone?”
Seller: “Yes… Over the phone……”
Senior Citizen: “OK wait… I’ll fax myself there…”
May you check Shakeys if they are following the official computation like what you posted?
Here is a copy of my latest Shakey’s computation.
1 Buddy Pack 5 pcs Chx ———- P472.00
Sub-Total ——————————- 472.00
Senior Citizen del/Co ……………. 20% -51.79
Vat-Exempt …………………………. 12% -31.07
AMOUNT DUE …………………… P389.14
Bakit ang andok’s dito sa pulo, cabuyao city, laguna hindi nagbibigay ng senior discount. Exempted ba sila?
For whom is this senior-citizin-discount meaned.
How do I get a senior-citizin-card?
I am living in Davao City but they donot give the SCD-card to foreigners?
Why not? As I think it is discrimination and I have a retirementvisum.
is 12%% VAT applied in the computation of hospital bills. my brother in law was hospitalized but its only the senior citizen discount and philhealth that was applied
Hi! I am working in a restaurant establishment near quezon ave., quezon city and wondering if what is the right computation and process of making sc discount. Example if there are 5 customers and 3 of them were senior citizens, they ordered more than 5 items. How will i discount? Which is right? Select the items that the seniors have eaten or just select all the items and put discount divided by the no.of pax or customers? Help me with this pleasr. Thank you!
Sir,
If a group of senior citizen ordered in a restaurant how should they bill get computed? Is it by the number of the citizen? Does this mean that every senior citizen must be less with 20% even if they re in a single receipt?
Sir
Pls reply to my inquiry. Thank you
Appreciate the effort to clarify the complication of Tax compliance.
1)With relation to this how is the proper filling of senior discount for bookkeeper?
2)Could you give us your idea on different implementation of tax discount?
Supermarket: not 20% disc implemented rather a certain weekly bracket is impose. (1
some food chain: max of P200 disc.
Restaurant : 10-20%
lodging: 10-20%
Thanks
What if a senior citizens buys an 8 slices- whole pizza? How would we compute this?
Hi ,
May i ask , im just quite confuse .im working in a restaurant and here is how we compute the discount.
=subtotal / 1.12 x 32% x # of senior / # of guest.
is it right? because i think we are giving over discount.
Thank you
Hello,
I just came from a Mercury Drugstore here in Las Pinas where I am buying my prescription medicine under the Senior Citizen program. I questioned the receipt regarding the VAT discount, the receipt shows:
Amount of Sale with VAT = 5195.25
Less 12% VAT = 556.63*
Total Amount = 4638.62**
Less: 20% Sales Discount= 927.72
Total Amount = 3710.90
* I asked how this figure was calculated, the manager told me that it is being calculated automatically by using BIR’s computation on VAT discount as Amount of Sale with Vat (in this receipt = 5195.25 divided by 1.12 is equal 4638.62** and 556.63* is calculated from 5195.25 less 4638.62. This is strange to me from the viewpoint of mathematical accounting. The VAT discount should simply be (in this particular receipt): Total Amount with 12% VAT Discount = 5195.25 minus 5195.25 x 12%= 5195.25 minus 623.43 = 4571.82. It looks like here that Senior Citizen is short-changed 66.80 pesos. May I ask please your comment on this.
Very truly yours,
Misael G. Sanoy
Hi,
I would like to clarify, should I do the computations on 2 and 3 if my business is non-vat?
Thanks in advance!
Use your pocket calculator:
(a) Divide the price by 1.12: to get the price without the added vat of 12%.
(b) Deduct 20% of the result in (a) from this result: in (a) to get the final amount to be paid, i.e. less 20%..
Here, use the keys of the pocket calculator:
For example 1, the bill comes to 1000 pesos:
(a) Enter 1000, then the press divide key, then enter 1.12: the result (not shown) is the price without the added vat of 12%.
(b) Now press the minus sign, enter 20, then press the % sign: right away the amount to pay will appear in the screen, which is 714.285714286 (round that into 714.30),
For example 2, the bill comes to 856.50 pesos:
(a) Enter 856.50, then press the divide key, then enter 1.12: the result (not shown) is the price without the added vat of 12%.
(b) Now press the minus sign, enter 20, then press the % sign: right away the amount to pay will appear in the screen, which is 611.785714286 (round that into 611.80).
On the given example, if the the discount will be give by Hotel lets say for room accommodation, the net 20% discount price can now add-on the applicable service charge imposed by Hotel?
I was trying to buy milk (Ensure) for my mother at Puregold and the cashier told us that for purchases 1500.00 and above, she will only be entitled to a fixed Php65.00 discount and limited to once a week availment. Is this true?
what if there are 8 guest the selling price is 1400 then they use one senior id ? may i ask your opinion ?
yes agree with Levin, how will I compute if there’s a group or family of 10 dining at the restaurant with only 1-2 seniors
Hi!
Is an authorization letter required everytime I need to buy my parents’ medicine? I have presented my mom’s SC ID and booklet but a certain pharmacy refused to let me avail of the discount. Your reply would be appreciated. Thanks.
10 people dined in and 3 of them were seniors.. all food ordered were food sharing.. there were also beers ordered. Total bill was 7000.
question:
1. HOW WILL YOU DEDUCT THE 20%
2. ARE LIQUORS INCLUDED IN THE DISCOUNT?
3. If they insist on 20 % discount on the total bill and wouldnt accept our explanations and still would like to demand and do legal actions.. what papers or documents can we show our customer just show the proper standard rules.. where can we get one?
You may refer to RMC 38-2012.