Benefits are any perks offered to employees in addition to their salary. Aside from the benefits that we are familiar with, like maternity leaves, thirteenth-month pays, and government contributions there are others that voluntarily being provided by our employers, and this is what we call De Minimis Benefits. These are benefits given by the employer to the employees that are relatively small value in addition to their regular compensation but are not considered as taxable compensation for income tax purposes nor subject to the fringe benefit tax. These benefits are intended for the employees to recognize their efforts and improve worker retention across the organization.
Below is the list of de minimis benefits with some items updated in amounts by Revenue Regulations No. 11-2018 (RR 11-2018):
- Monetized unused vacation leave credits of private employees not exceeding 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 P1,500 per employee per semester or P250 per month (as amended by RR 11-2018);
- Rice subsidy of P2,000 or one sack of 50-kg rice per month amounting to not more than P2,000 (as amended by RR 11-2018);
- Uniforms and clothing allowance not exceeding P6,000 per annum (as amended by RR 11-2018)
- Actual medical assistance, e.g., a therapeutic benefit to cover medical and healthcare needs, annual medial/executive check-up, maternity assistance, and routine consultations, not exceeding 10,000 per annum;
- Laundry allowance not exceeding P300 per month;
- Employees’ achievement awards, which must be in the form of tangible personal property other than cash or gift certificates, 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 given during Christmas and major anniversary celebrations not exceeding P5,000 per employee per annum;
- Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the basic minimum wage; and
- Benefits received by an employee by virtue of a Collective Bargaining Agreement (CBA) and productivity incentive schemes, provided the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed P10,000 per employee per taxable year.
Any amount of de minimis benefits in excess of the threshold can still be exempt as “other benefits,” together with the employees’ 13th month pay, but not to exceed P90,000.
