Late in December 2014, there has been many articles in the social media discussing the expanded the list of de minimis benefits exempted from income tax on compensation, to include benefits under collective bargaining agreements (CBAs) and productivity incentive schemes. The inclusion of this additional item was described as “a fitting gift to our workers in this holiday season”. It is said as well that expanding the list of tax-exempt de minimis benefits was one of the demands of labor at the dialogue with the President in the last Labor Day commemoration in May 2014
A post from the Official Gazette of the Republic of the Philippines was well-shared in the social media, but what exactly are included in the expanded list?
On January 5, 2015, the Bureau of Internal Revenue issued Revenue Regulations (RR) No. 1-2015 to further amend previously issued regulations covering de minimis benefits to include:
(k) Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme provided that the total annual monetary value received from both CBA and productivity incentive scheme combined do not exceed ten thousand pesos (Php 10,000) per employee, per taxable year.
Currently, the full list of de minimis benefits which are not subject to income tax on compensation as well as fringe benefits tax:
- 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, not exceeding P750 per employee per semester or P125 per month;
- Rice subsidy of P1,500 of one (1) sack of 50 kg. rice per month amounting to not more that P1,500;
- Custom Uniforms and clothing allowance not exceeding P5,000 per annum;
(last amended by RR No. 8, 2012)
- Actual medical assistance, e.g. medical allowance to cover medical and heathcare needs, annual medical/executive check-up, maternity assistance, and routine consultations, not exceeding P10,000 per annum;
- Laundry allowance not exceeding P300 per month;
- Employees achievement awards, e.g., for length of service or safety achievement, which must be in the form of a tangible personal property other than cash or gift certificate, with an annual monetary value not exceeding P10,000 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
- Gifts and hampers given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum, try getting them at https://www.honeyspree.com/collections/newborn-hamper
- Daily meal allowance for overtime work and night/graveyard shift not exceeding twenty-five percent (25%) 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 scheme provided that the total annual monetary value received from both CBA and productivity incentive scheme combined do not exceed ten thousand pesos (P10,000) per employee, per taxable year.
Any amount in excess of their respective ceiling shall be included in 13th month pay and other benefits in determination of the P30,000 nontaxable ceiling. Other benefits given by employers which are not included in the above enumeration shall not be considered as de minimis benefits, and hence, shall be subject to income tax as well as withholding tax on compensation income for rank and file employees or fringe benefits tax for managerial and supervisory employees.
The total amount of de minimis benefits that each worker-taxpayer can claim can reach P104, 225, up by P10,000 from the previous level of P94, 225, supposing all of the above items are availed. The list may seem long, however, these benefits are normally not being provided by most companies to their employees as these are not mandatory benefits. And even if all of the above items are granted to employees, the entitlement to some of these items are still subject to certain conditions, which should be meet before these can be received by the employees.’
References:
- Revenue Regulations No. 2-98
- Revenue Regulations No. 3-98
- Revenue Regulations No. 5-2008
- Revenue Regulations No. 5-2011
- Revenue Regulations No. 8-2012
- Revenue Regulations No. 1-2015
Let us know what you think! 🙂
hello, tanong ko lang po, magkaiba po ba ang transportation allowance, meal allowance, communication allowance sa de minimis?
and kung kaiba naman po sya de minimis ay ano yung allowed amount nya to be considered non-taxable?
and pano po kung walang specification kung para saan ang de minimis like nakalagay sa monthly payslip is de minimis-P2500.00
Thank you po in advance and sana po masagot ninyo
hi sir ask ko lang po…ano po ang bracket ng salary na non taxable?
Hindi ko po sure what do you mean bracket. But non-taxable compensation is dependent on the types and amounts of compensation your employer is giving you.
Sir, itong “Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme provided that the total annual monetary value received from both CBA and productivity incentive scheme combined do not exceed ten thousand pesos (P10,000) per employee, per taxable year.” same lang po ba to sa taxation of performance-based incentives na may 10,000 tax-free limit na kasama sa 82,000 ceiling para sa 13th month pay and other benefits? Hope mapansin niyo po ako. Thank you po.
Hi, tanong ko lang po. We give additional 2500/month to our employees for their position/tasks apart from the basic pay. Can it be considered de minimis benfits? we calculated it including the 13th month pay and other benefits and it doesn’t reach the 82k ceiling. SO we dont deduct Wtax for the 2500/month. Am I doing it right?
That’s a regular compensation and not de minimis. It should be taxable.
Hi.. tanong ko lang po sana to.. first time kc namin makita to sa payslip namin.. we we’re receiving incentives before pero wala pong ganito.. yung de minimis benefits 10k
10k per month po na de minimis? Well, if you ask what is de minimis, pakibasa na lang po yung discussion sa taas. Pero if you want to find out why you have that, you may ask your company po.
Is it possible not to give any such de minimis benefits to an employee?
Yes. De minimis is not mandated to be given by law. Unless it’s stipulated in the collective bargaining agreement with your employees.
“The total amount of de minimis benefits that each worker-taxpayer can claim can reach P104, 225, up by P10,000 from the previous level of P94, 225, supposing all of the above items are availed. The list may seem long, however, these benefits are normally not being provided by most companies to their employees as these are not mandatory benefits. And even if all of the above items are granted to employees, the entitlement to some of these items are still subject to certain conditions, which should be meet before these can be received by the employees.’” – what does certain conditions mean?
Conditions, example for the “Actual medical assistance”, if the employee will not get sick, how will you give the employee an “actual” medical assistance? So the condition there is the sickness or hospitalization. Same with others.
okay, now i get it.
hello! I am a bilingual employee and I am being paid a language premium from day 1. This is part of our monthly pay and cannot be missed just like basic salary. My question is should our language premium be included on our 13th month pay considering that this is part of our monthly pay just like our basic pay?
Also, whenever we are late or absent our language premium is being deducted as it is also considered as basic pay, however whenever we do OT work our language premium is not included on our pay because as per HR only the basic is to be paid when doing OT.
Hope you can help us on this, and thank you in advance for your help :).
Your HR is correct. The basis for OT, holiday, and 13th month pay is only the basic. And yes, even allowances are subject to proportionate deduction for tardiness and absences.
de minimis effective last 5th January 2015, Sir ask ko lang I started working with my company and Had Language allowance up to this day and it was taxable… does it mean po ba nung 2012 dapat hindi taxable ang language premium?
kung hindi po un dapat taxable, ano po dapat kong gawin? pwede po ba ako magreklamo para maclaim ko ung binawas nilang tax sa previous language premium ko?
waiting for your response po!
Taxable po yun. It’s not falling under any de minimis benefit above. Isa lang naman po jan ang effective 2015. All the rest are effective matagal na po.
Kasama po ba sa Non Taxable ang P9000 Car allowance monthly?
Taxable. All allowances not falling under “de minimis” as discussed herewith are taxable.
Is Car allowance of 9K per month Taxable po?
Yes!
ok thank you, is it ok na nakalagay sa payroll na rice subsidy is 4500?or just the 1500 then the excess was in the other benefits account?
You can include the P1,500 under “Rice allowance – nontaxable” and the P3,000 under “Rice allowance – taxable”.
Not yet… You have to compare the excess, combined with 13th month pay and other benefits pa with the P82k ceiling. 🙂
Hi, what if sa Rice subsidy is 1500 per month pero nag exceed kami naging 4500 per month..taxable ba yung excess or pwede sya ibawas sa 82000 na exemption sa 13th month pay & other benefits.thank you
Yes, basta di po nameet yung mga criteria as discussed above, taxable po yan.
Yes! "and" naman po ang sabi.. Basta if combined with CBA eh dapat less than 10k. Pag lumagpas, taxable ang excess.
Hi Marie, Attendance bonus, can be exempted up to P82,000 but combine 13th month pay, and other bonuses in comparing to P82k. Clothing allowance not taxable up to P5,000 per annum (P416.67 per month). Medical allowance to dependents P125 per month. Actual medical assistance up to P10,000 per year. Laundry allowance not taxable up to P300 per month. Language premium and account allowance are taxable.
hi, if an employee is able to get an attendance bonus of P4000 a month is that still taxable? how about the other allowances like clothing allowance, medical laundry , meal allowance and the language premium and account allowance are these taxable as well?
Regarding the P10k de minimis benefit, may productivity incentive scheme po ang company namin pero wala po kaming CBA kasi wala po kaming unyon. Tanong ko lang po yun po bang productivity incentive na narereceive namin pwedeng maging part ng de minimis benefits basta hindi lalampas ng P10k kahit wala po kaming CBA?
Revenue Regulations (RR) No. 1-2015 (k) Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme provided that the total annual monetary value received from both CBA and productivity incentive scheme combined do not exceed ten thousand pesos (Php 10,000) per employee, per taxable year.
Sir magkano po ba maximum na non-taxable allowance pwede ibibgay sayo ng company? Thank you.
Taxable po ba ang allowance for temporary position? example being an OIC in a department?
Yes, depends on the grant of the company..
possible ba na zero talaga yung mareceive na de minimis benefit
Thank you for the info sir, it can help a lot to me in my future small bizniz soon regarding operation n taxation…hope you can give me some more info or ideas in future regarding business operation n taxation.
Richvy Richneth Completo Yes, for managerial, as long as it doesn't exceed the limits. Otherwise, it will become taxable subject to fringe benefit tax.
Salamat sir, how about if employee k s sariling bizniz mo as manager/ceo o ano gusto n position, applicable ba to ang "de minimis"?
No, employees lang po. 🙂
tanong lng po, about s "de minimis", applicable b 2 s self-employed o sole proprietorship business, paano? pwede b 2 gawing deductible s business taxable income?
I see. Thanks for clarifying!
Regarding your questions, the timing of the entitlement of the employee to de minimis depends on the nature of the item. For example, if it's rice subsidy, it can be on a monthly basis. If it's a clothing allowance, it is stated monthly but can be given monthly by dividing it by 12. However for example, the actual medical assistance, you can just provide for it upon actual happening. So it's not straight P104,225/12. Case to case basis depending on the nature of the de minimis provided.
"The total amount of de minimis benefits that each worker-taxpayer can claim can reach P104, 225, up by P10,000 from the previous level of P94, 225, supposing all of the above items are availed."
How does this relate to a monthly set of benefits? Is it correct to assume that a worker-taxpayer can have a max of non-taxable allowance amounting to P8685.xx with the new changes?
Hi Sir, can the Actual Medical Assistance be given on top of the HMO plans like Intellicare, Maxicare and the likes? We have HMO plans provided by the comapny and just wanted to know if the company can still legally provide us the Actual Medical Assistance if approved by the company board?
If wala pong actual OT pay and gusto namin gamitin yung OT meal allowance as deminimis, pwede po ba namin ioffset yun sa salaries and wages? sa journal entries deduction from salaries & wages, and additional benefits as welfare lang yung treatment? Thank you
Orlando O. Calundan
Pwede naman po.. Basta i-approve ng company nyo..
Hi! pwede po ba mg claim ng 25% meal allowance as de minimis khit wlang actual overtime pay? wla po kc kmi bayad khit mg OT kmi, fixed rate lng kmi per month
82,000 from 30,000. Pero when computing for taxable income under the congress' implication, 30,000 pa din ceiling. As per BIR lng ang 82,000.
Hello po. wala po kayong update regarding sa increase in ceiling ng other benefits + 13th month pay. Thanks! 🙂