Amendments on De Minimis Benefits Tax Exemptions

De minimis benefits refer to facilities or privileges of relatively small value.
Furnished by the employer to promote employee health, goodwill, contentment, or efficiency.
These benefits are exempt from income tax and fringe benefit tax.

Monetized unused vacation leave credits of private employees (not exceeding 10 days per year).
Monetized vacation and sick leave credits of government officials and employees.
Medical cash allowance to dependents, capped at PHP 750 per semester or PHP 125 per month per employee.
Rice subsidy, maximum PHP 1,500 or 50 kg sack per month.
Uniform and clothing allowance, capped at PHP 4,000 per annum.
Actual medical assistance including medical allowance, annual medical/executive check-ups, maternity assistance, and routine consultations, capped at PHP 10,000 per annum.
Laundry allowance, maximum PHP 300 per month.
Employees’ achievement awards (for length of service or safety), only if tangible personal property (not cash or gift certificate), capped at PHP 10,000 annually, under a non-discriminatory written plan.
Gifts during Christmas and major anniversary celebrations, capped at PHP 5,000 per employee per annum.
Daily meal allowance for overtime and night/graveyard shift, capped at 25% of the basic minimum wage based on region.

Benefits enumerated are exempt from:
- Income tax on compensation.
- Withholding tax on compensation income.
- Fringe benefit tax.
All other benefits not explicitly listed are subject to taxation.

Section 2.78.1 (A)(3)(c) and (d) of RR 2-98 amended regarding withholding income tax on de minimis benefits.
Section 2.33 (C) of RR 3-98 amended regarding exemption from fringe benefit tax for de minimis benefits.

All inconsistent rules and regulations are revoked, repealed, or modified accordingly.

The regulations take effect fifteen (15) days after publication in a newspaper of general circulation.

Approved and signed by the Secretary of Finance and Commissioner of Internal Revenue on March 16, 2011.