What are De Minimis benefits?
De Minimis benefits are facilities or privileges, of relatively small value, offered or furnished by the employer to it’s employees as a means of promoting their health, goodwill, contentment, or efficiency. These benefits are not subject to income tax as well as withholding tax on compensation income for both managerial and rank and file employees.
Whats new?
On December 22, 2025, the Bureau of Internal Revenue released Revenue Regulation 029-2025 which amends Revenue Regulation 2-98 with respect to De Minimis benefits. It increases the ceiling of all Non-taxable benefits.
Source: https://bir-cdn.bir.gov.ph/BIR/pdf/RR%20No.%2029-2025.pdf
What are the De Minimis benefits?
The following shall be considered as De Minimis benefits not subject to income tax as well as withholding tax on compensation income of both managerial and rank and file employees:
- Monetized unused vacation leave credits of private employees not exceeding twelve (12) days during the year;
- Monetized value of vacation and sick leave credits paid to government officials and employees;
- Medical cash allowance to dependents of employees, not exceeding Php2,000.00 per employee per semester or Php333.00 per month;
- Rice subsidy of Php2,500.00 or one (1) sack of 50 kg. rice per month amounting to not more than Php2,500.00;
- Uniform and Clothing allowance not exceeding Php8,000.00 per annum;
- Actual medical assistance, e.g., medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding Php12,000.00 per annum;
- Laundry allowance not exceeding Php400.00 per month;
- Employees achievement awards, e.g., for length of service or safety achievement, in any form, whether in cash, gift certificate or any tangible personal property, with an annual monetary value not exceeding Php12,000.00 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
- Gifts given during Christmas and major anniversary celebrations not exceeding Php6,000.00 per employee per annum;
- Daily meal allowance for overtime work and night/graveyard shift not exceeding thirty percent (30%) of the basic minimum wage on a per region basis;
- Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive schemes provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed Php12,000.00 per employee per taxable year;
What if employees receive more than the limit for De Minimis benefit?
If an employee receives more than the limit for each De Minimis benefit, the excess of each limit is added to the employee’s other benefits which, when added with the 13th month pay, has a limit of Php90,000.00 before the excess becomes subject to income tax and withholding tax.
Here is an example of how to apply the excess of De Minimis benefits:
Scenario 1
Uniform allowance (De Minimis benefit): Php10,000.00
Load allowance (Other benefit): Php20,000.00
13th month pay: Php50,000.00
Total other benefits: Php22,000.00 (20,000.00 + 2,000.00 excess of the 8,000.00 uniform allowance limit)
Total other benefits and 13th month pay: Php72,000.00 (50,000.00 + 22,000.00)
Amount subject to income tax and withholding tax: Php0.00 excess of the 90,000.00 limitScenario 2
Uniform allowance (De Minimis benefit): Php10,000.00
Load allowance (Other benefit): Php20,000.00
Transportation allowance (Other Benefit): Php50,000.00
13th month pay: Php50,000.00
Total other benefits: Php72,000.00 (50,000.00 + 20,000.00 + 2,000.00 excess of the 8,000.00 uniform allowance limit)
Total other benefits and 13th month pay: Php122,000.00 (50,000.00 + 72,000.00)
Amount subject to income tax and withholding tax: Php32,000.00 excess of the 90,000.00 limitThe Synergy Human Resource Information System (Synergy HRIS) allows your organization to easily track De Minimis and other benefits as well as compute mandatories and withholding tax for your employees.