year.
This means that if the total value of
DE MINIMIS BENEFITS
De minimis benefits are non-taxable
allowances or perks that employers give
their employees in the Philippines.
Usually, there are of relatively small
value or a minimal amount.
What is de minimis in the
Philippines?
Private employees often receive benefits
that are not part of their basic minimum
wage. When relatively small in value or
amount, these are classified as de
minimis benefits.
These include non-taxable benefits,
allowances, or perks given by
employers to their employees in the
Philippines. When they are below the
cap, these benefits are generally not
subject to income tax.
How much are de
minimis benefits in the
Philippines?
De minimis benefits are non-taxable up
to a certain monetary limit, which is
currently set at Php 90,000 per
the benefits received by an employee
within a year does not exceed Php
90,000, they will not be subject to
income tax.
What if the de minimis benefits
exceed the Php 90,000 limit?
Should the total bonuses for the year,
including the de minimis benefits,
exceed the Php 90,000 limit, it will be
subject to the withholding tax rates of
rank-and-file employees. In contrast, the
Fringe Benefits Tax (FBT) of 32% will
apply if the employee holds a managerial
position.
Is de minimis part of the 13th-
month pay?
No, de minimis benefits are not part of
the 13th-month pay. The 13th-month pay
is a separate benefit mandated by law,
which requires employers to pay their
employees an additional month’s worth
of salary by December 24th of each year.
Moreover, it is not included when
computing the 13th-month pay as it only
factors the employee’s basic salary.
Is it included in the basic salary?
No, de minimis benefits are not included
in an employee’s basic salary. They are
separate from the employee’s regular
salary and are given as additional perks
or allowances.
What is the de minimis limit in
the Philippines?
The de minimis and other bonuses limit
in the Philippines is currently set at PHP
90,000 per year. This means that if the
total value of the de minimis benefits
received by an employee within a year
does not exceed PHP 90,000, they will
not be subject to income tax.
What is the new de
minimis benefits rule under the
TRAIN Law?
Under the Tax Reform for Acceleration
and Inclusion law, there have been
changes to the previous de minimis
benefits that employees enjoy. Mostly, it
clarifies what items are exempt from
income tax and withholding tax.
Starting in 2018, the following changes
were made to the de minimis benefits
under the TRAIN law:
Increase in total annual value
The law increased the total annual value
of de minimis benefits that employees
can receive from Php 82,000 to Php
90,000.
New de minimis inclusions
The TRAIN Law also added the
following under de minimis benefits:
 Rice subsidy cap
 Uniform and clothing
allowance
 Actual medical benefits
 Laundry allowance cap
 Employees’ achievement
awards or loyalty awards
with monetary value
  Rules on the gifts on
Christmas and major
anniversary celebrations

Increase in de minimis tax-

exemption
TRAIN increased the law tax-exempt
threshold for the 13th-month pay and
other benefits from Php 82,000 to Php
90,000. In other words, benefits
amounting to Php 90,000 or less are non-
taxable.

De Minimis beyond Php 90,000

Anything in excess of the Php 90,000
bonus threshold is taxable under the law.