FRINGE BENEFITS &

DE MINIMIS BENEFITS
Presented By :

James Daniel Vanzuela Alona Jay Pangilinan Leila Marielle Dunque Princess Chyle Palahang
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FRINGE BENEFIT TAX
is a final withholding tax imposed on the grossed-up monetary
value of the fringe benefit furnished, granted or paid by the
employer to managerial or supervisory employees, whether
such employer is an individual, professional partnership or
corporation, regardless of whether the corporation is taxable or
not, or the government and its instrumentalities.

FBT
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FRINGE BENEFIT TAX
means any good, service, or other benefit furnished or
granted by an employer in cash or in kind, in addition to
basic salaries, to an individual employee (except rank file
employee)

FBT
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FRINGE BENEFIT TAX
is effective regardless of whether the
employer is an individual, professional
partnership or corporation.

FBT
 ITEMS OF FRINGE BENEFITS SUBJECT TO TAX: 2
1) Housing;
2) Expense Account;
3) Vehicle of any kind;
4) Household personnel, such as maid, driver and others;
5) Interest on loan at less than market rate to the extent of the difference between
the market rate and the actual rate granted;
6) Membership fees, dues and other expenses borne by the employer for the
employee in social and athletic clubs or other similar organizations;
7) Holiday and vacation expenses;
8.) Educational assistance to the employee or his dependents;
9) Life or health insurance and other non-life insurance premiums or similar
amounts in excess of what the law allows; and
10) Expenses for foreign travel;
FBT
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COMPUTATION OF FBT

FBT
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How much is the allowable deduction from
business income of a domestic corporation
which granted and paid 97,500 fringe benefits
to its key officers in 2023?
a. 150,000 c. 97,500
b. 100,000 d. 65,00

FBT
 GSM Corporation purchased a residential unit 5
to be assigned for use of one of its Manager.
The purchased price of the unit is 5,000,000
while its zonal value is 8,000,000. ( Thers no
transfer of ownership for this unit to the
manager).
1. How much is the gross up monetary value of the benefit?
a. 307,692 c. 615,384
b. 384,615 d. 461,538
2. How much is the fringe benefit tax?
a. 215,384 c. 161,538
b. 107,692 d. 134,615
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TAX EXCEMPT FRINGE BENEFITS
The following fringe benefits shall not be subject to basic tax or fringe
benefit tax:
1) Fringe benefits which are authorized and exempted from income tax
under any special law
2) If the grant of fringe benefits to the employee is required by the nature
of, or necessary to the trade, business or profession of the employer.
3) De minimis benefits
4) If the grant of benefits is for the convenience or advantage of the
employer.
5) Non-taxable housing benefits
6) Other Fringe Benefits
FBT
 DE MINIMIS BENEFITS 7
Facilities and Privileges such as entertainment, medical services, or so
called "courtesy' discounts on purchases, otherwise known as "De Minimis
Benefits," furnished or offered by an employer to employees, are not
considered as compensation subject to income tax and consequently to
withholding tax, if such facilities or privileges are of relatively small value
and are offered or furnished by the employer merely as means of
promoting the health, goodwill, contentment or efficiency of his
employees [Section 2.78.1 (A)(3) of RR 2-98 as amended by RR 10-2008, RR
5-2011., RR 8-2012 and RR 1-2015]. These benefits are exempt from
withholding tax on compensation and fringe benefits tax (FBT), regardless
of the position of the employee who received such benefit(s).
FBT
 DE MINIMIS BENEFITS 8
The following shall be considered de minimis benefits not
subject to income tax as well as withholding tax on
compensation income of both managerial and rank and file
employees:
1) Monetized unused vacation leave credits of private
employees not exceeding "10 days" during the year.
2) Monetized value of vacation and sick leave credits paid to
government officials and employees.

FBT
 DE MINIMIS BENEFITS 9
3) Medical cash allowance to dependents of employees not
exceeding P1,500 per semester or P250 a month.

4) Rice subsidy of not more than P2,000 per month or 1 sack

(50kg.) rice per month.

5. Uniforms given to employees by the employer not exceeding

P6,000 per annum (as amended by RR 8-2018).

FBT
 DE MINIMIS BENEFITS 10

6. Actual medical assistance given not exceeding P10,000 per

annum such as medical allowance to cover medical and
healthcare needs, annual medicalexecutive check-up,
maternity assistance and routine consultations.

7. Laundry allowance not exceeding P300 per month.

FBT
 DE MINIMIS BENEFITS 11
8. Employee 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 and
annual monetary value not exceeding P10,000 under an
established written plan which does not discriminate in favor
of highly paid employees).

9. Gifts given during Christmas and major anniversary

celebrations not exceeding P5,000 per employee per annum
(RR8 2012). FBT
 DE MINIMIS BENEFITS 12
10.Daily meal allowance for overtime work and night/graveyard
shift not exceeding 25% of the basic minimum wage on a per
region basis provided such benefit is given on account of
overtime work or if given to employees on nightigraveyard
shift.

11. Benefits received by an employee by virtue of a collective

bargaining agreement (CBA) and Productivity incentive
schemes provided that the total annual monetary value
received from the two (2) items above combined, do not
exceed P10,000.00 per employee per taxable year (RR 1-2015).
THANK YOU