QuestionsQuestions (BIR REVENUE REGULATIONS NO. 8-2000)
De minimis benefits are not considered compensation subject to income tax and consequent withholding tax if they are furnished or offered by the employer merely as a means of promoting the health, goodwill, contentment, or efficiency of employees.
It indicates that only benefits/privileges that are relatively small in value and that meet the purpose of promoting employees’ health, goodwill, contentment, or efficiency may be treated as de minimis and thus excluded from income tax/withholding tax (if within the prescribed ceiling and conditions).
Monetized unused vacation leave credits not exceeding ten (10) days during the year are considered de minimis benefits and not subject to withholding tax on compensation income (for managerial and rank-and-file employees).
Medical cash allowance to dependents not exceeding P750.00 per employee per semester or P125.00 per month qualifies as de minimis and is not subject to withholding tax on compensation (subject to the regulations’ treatment).
A rice subsidy of P1,000.00 or one (1) sack of 50-kg rice per month is treated as de minimis if it amounts to not more than P1,000.00 per month.
Uniforms and clothing allowance not exceeding P3,000 per annum qualifies as de minimis and is not subject to withholding tax.
Actual yearly medical benefits not exceeding P10,000 per annum qualify as de minimis benefits.
Laundry allowance not exceeding P300 per month qualifies as de minimis benefits.
They must be in the form of a tangible personal property other than cash or gift certificate, must have an annual monetary value not exceeding P10,000, and must be received under an established written plan that does not discriminate in favor of highly paid employees.
They must not exceed P5,000 per employee per annum.
Flowers, fruits, books, or similar items given under special circumstances such as on account of illness, marriage, birth of a baby, etc.
Daily meal allowance for overtime work is de minimis if it does not exceed 25% of the basic minimum wage.
The amount exceeding the prescribed ceiling shall be taxable to the employee receiving the benefits only if such excess is beyond the P30,000.00 ceiling (as stated in the regulation).
Amounts of de minimis benefits conforming to the ceiling are not considered in determining the P30,000 ceiling of “other benefits.” However, any excess beyond the ceiling becomes taxable, and the regulation ties taxation to the P30,000 limitation.
Yes. The regulation provides that any amount given by the employer as benefits to employees, whether classified as de minimis benefits or fringe benefits, shall constitute a deductible expense upon such employer.
They are not subject to income tax and hence not to withholding tax, provided the RATA is granted to public officers and employees under the General Appropriations Act, and PERA essentially constitutes reimbursement for expenses incurred in the performance of government personnel’s official duties.
ACA given to government personnel is not subject to withholding tax pending its formal integration into basic pay. For taxable year 2000, ACA is classified as part of the “other benefits” excluded from gross compensation provided the total amount does not exceed P30,000.00.
Such allowances received in addition to regular compensation are compensation subject to withholding tax.
When (1) they are for ordinary and necessary traveling/representation/entertainment expenses incurred in pursuit of the employee’s trade/business/profession, and (2) the employee is required to account/liquidate with substantiation requirements under Section 34 of the Tax Code. Excess over advances not returned becomes taxable.
Other benefits such as Christmas bonuses, productivity incentives, loyalty awards, cash or in-kind gifts, and similar nature actually received by officials and employees of government and private offices (including ACA for NGAs, SUCs, GOCCs, GFIs, and LGUs) are excluded from withholding tax if total amount does not exceed P30,000.00 for the year (subject to possible increases via rules of the Secretary of Finance upon recommendation of the Commissioner).