Question & AnswerQ&A (BIR REVENUE REGULATIONS NO. 5-2011)
The purpose of BIR Revenue Regulations No. 5-2011 is to further amend Revenue Regulations Nos. 2-98 and 3-98, as last amended by RR No. 5-2008, with respect to de minimis benefits which are exempt from income tax on compensation and from fringe benefit tax.
De minimis benefits refer to facilities or privileges furnished or offered by an employer to employees that are of relatively small value and given to promote health, goodwill, contentment, or efficiency of employees. These benefits are exempt from income tax and fringe benefit tax.
1. Monetized unused vacation leave credits of private employees not exceeding 10 days during the year. 2. Medical cash allowance to dependents of employees, not exceeding P750 per employee per semester. 3. Rice subsidy of P1,500 or one sack of 50 kg rice per month, not exceeding P1,500.
Yes, gifts given during Christmas and major anniversary celebrations are considered de minimis benefits, with an annual limit of P5,000 per employee.
No, the monetized value of vacation and sick leave credits paid to government officials and employees is exempt from income tax and is considered a de minimis benefit.
The uniform and clothing allowance must not exceed P4,000 per annum to be considered a de minimis benefit.
No, employees' achievement awards in the form of tangible personal property (other than cash or gift certificates) with an annual value not exceeding P10,000, given under an established written plan without discrimination, are exempt from fringe benefit tax as de minimis benefits.
Daily meal allowances for overtime work and night/graveyard shifts are considered de minimis benefits and not subject to income tax or fringe benefit tax if they do not exceed 25% of the basic minimum wage per region.
The provisions apply to income earned starting the year 2011, and the regulations took effect 15 days after publication in a newspaper of general circulation.
Benefits not included in the enumerated de minimis benefits are subject to income tax and withholding tax on compensation income.