Benefits, aside from the salary, are one of the main things an employee considers when applying for a job, especially in this economy. Rewards and a proper compensation system help retain not only the person but also the talent that makes the workplace function and succeed, fostering stronger ties with the workplace and commitment to work.
In the Philippines, benefits come in taxable and non-taxable forms. De minimis benefits are small, non-taxable (neither by income, withholding, nor fringe) compensation/perks given by employers that aim to enhance employee wellbeing and morale per Section 2.78.1 of the Revenue Regulations No. 02-98 (RR No. 2-98), as amended by RR No. 11-18, and Section 33(C) of the National Internal Revenue Code of 1977 (NIRC), as amended by the by the Tax Reform for Acceleration and Inclusion (TRAIN) Law.
What are considered de minimis benefits?
As of RR No. 04-25 amending RR No. 2-98 and 11-18, the following are considered de minimis benefits:
- Monetized unused vacation leave credits of private employees not exceeding ten (10) 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 up to ₱1,500 per semester of ₱ 250 per month
- Rice subsidy up to ₱2,000 or one sack of 50kg rice per month, amounting to not more than ₱2,000
- Uniform and clothing allowance not exceeding ₱7,000 per annum (formerly ₱6,000 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 P10,000 per annum
- Laundry allowance up to ₱300 per month
- Employee achievement awards, whether in cash, gift certificates, or any tangible personal property, with an annual monetary value not exceeding ₱10,000, received by the employee under an established written plan that does not discriminate in favor of highly paid employees
- Holiday and major anniversary celebration gifts not exceeding ₱5,000 per employee per annum
- Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the basic minimum wage on a per-region basis
- Benefits received under a Collective Bargaining Agreement and productivity incentive schemes, provided that the total annual monetary value received from both CBA and productivity incentive schemes combined does not exceed ₱10,000 per employee per annum
Disclaimer: The content of this blog is for informational and educational purposes only and should not be considered as legal advice. While we strive to provide accurate and up-to-date information, the blog does not create an attorney-client relationship. For legal concerns or specific legal guidance, please consult a qualified lawyer.
To read more STLAF legal tidbits, visit www.sadsadtamesislaw.com/bits-of-law.
For comments, suggestions, and inquiries, email legal@sadsadtamesislaw.com.
Author/s: Patricia Mae L. Minimo
About the author: Patricia Mae L. Minimo is the Firm’s writer. She is a Communication graduate from the University of the Philippines – Baguio with a major in Journalism and a minor in Speech Communication.