What is Fringe

Benefits?
 Fringe Benefits

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
 Important Points:
1. Fringe benefit tax is a final withholding tax.
2. The tax base is the grossed-up monetary value.
3. The tax rate is 35%.
4. It is imposed only on managerial and supervisory employees who are
recipient of the taxable fringe benefits.
5. The amount received by the employee is the monetary value.
6. The fringe benefit tax is imposed on the employee but the burden is
shouldered by the employer.
Fringe Benefits
NRA (NETB) in the
Philippines
Tax rate 25%.
Tax base - G-up MV = MV / 75%.
 De Minimis Benefits
The "de minimis benefits" which are exempt from
the fringe benefits tax shall, in general, be limited to
facilities or privileges furnished or offered by an employer
to his employees that are of relatively small value and
are offered or furnished by the employer merely as a
means of promoting the health, goodwill, contentment,
or efficiency of his employees. These are not subject to
income tax and WT on compensation income of
managerial, supervisory and rank-and-file employees, to
wit:
 De Minimis Benefits
• 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;
• Rice subsidy of P2,000 or one (1) sack of 50-kg rice per month
amounting to not more than P2,000;
 De Minimis Benefits
• Uniforms and clothing allowance not exceeding P6,000 per annum;
• Actual medical assistance, e.g. medical allowance to cover medical and
healthcare needs, 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 P10,000.00 received by the employee under an established
written plan which does not discriminate in favor of highly paid
employees;
 De Minimis Benefits
• Gifts given during Christmas and major anniversary
celebrations not exceeding P5,000 per employee per annum;
and
• j. Daily meal allowance for overtime work and night
graveyard shift not exceeding 25% of the basic minimum
wage.
• k. Benefits received by an employee by virtue of a collective
bargaining agreement (CBA) and productivity
Notes:
 Amounts given within the ceiling shall not be included in
the P90,000 other benefits.

 If the employer pays more than the ceiling prescribed,

the excess shall be taxable to the employee if such
excess is beyond the P90,000 ceiling.
 Any amount given by employer as Jon benefit (de
minimis or fringe benefits) to its employees shall be
deductible expense of such employer.
1. If the fringe benefit is given in 2018, the tax rate is
a. 35%
b. 65%
c. 25%
d. 32%

2. 19.In January 2018, the manufacturing engineer received

P16,250 fringe benefit from its employer. The deductible fringe
benefit expense and the fringe benefit tax, respectively, to the
employer is

FBE FBT FBE FBT

a. P 16,250 P 5,688 c. P 16,250 P 5,200
b. P 23,897 P 7,647 d. P 25,000 P 8,750
3. Which ceiling on the following de minimis benefits is not
correct?
A. Monthly rice allowance – P2,000

B. Monetized value of vacation and sick leave credits paid to

government officials and employees - 10 days
C. Uniform and clothing allowance – P6,000 per annum

D. Medical cash allowance to dependents _ P250 per month

4. The ceiling on rice allowance as de minimis benefit is
E.
A. None of the
P1,000 per above
month D. P 18,000 per annum
B. P 1,500 per month E. None of the above

C. P 2,000 per month

5. In 2018, Miss Minnie Dy received annual clothing allowance
amounting to P9,000. Her 13th month pay is P80,000. No other
benefits were received for the entire year. Which of the following
statements is false?
a. The excess of P3,000 shall be taxable.
b. The entire Other Benefits of P83,000 is tax exempt.

c. Exempt on the entire P89,000.

d. The entire clothing allowance of P9,000 is tax exempt.

6. 13th month
e. None of pay and other benefits is exempt up to a maximum
the above
amount of
a. P 80,000 c. P 90,000 e. None of the above

b. 82,000 d. 92,000
 The employees AB Company received the following fringe
benefits from their employer in June 2018
Chief Operating Officer (managerial employee) P 16,250
Two Supervisors, per person 3,900
Fifteen clerks and laborer, per person 3,000
7. The fringe benefits tax expense is
A. P 23,150 C. 10,850 E. None of the above
B. 20,150 D. 12,950
8. The deductible fringe benefit expense is
A. P 82,000 C. 10,850 E. None of the above

B. 40,000 D. 34,000
9. The amount of fringe benefits tax withheld should be remitted by
AB Company not later than

A. April 15, 2019 C. July 20, 2018 E. None of the above

B. July 10, 2018 D. July 31, 2018

10. The remittance should be made thru

A. BIR Form 1601-FQ C. BIR Form 1602Q E. None of the above

B. BIR Form 1603Q D. BIR Form 1604CF

11. Which of the ceilings on the following de minimis benefits is
correct? Uniform allowance
Rice subsidy
A. P 1,200 P 3,000
B. 1,000 4,000
C. 2,000 6,000
D. 1,500 5,000
12. 9.In 2018, the Company gave fringe benefit to its employees.
The amount of benefit received by employee France is P32,500.
The total amounts given to the rank-and file employees amounted
to P40,000.

a. How much is the fringe benefit tax if France is a supervisory

employee?
b. How much is the deductible expense on the company?
c. How much is the fringe benefit tax if France is a rank-and-file
employee?
What is Fringe
Benefits?
 Favorite
lesson
Far far away, behind the word mountains, far from the countries
Vokalia and Consonantia, there live the blind texts.

Separated they live in Bookmarksgrove right at the coast of the

Semantics, a large language ocean. A small river named Duden flows
by their place and supplies it with the necessary regelialia.
 I liked the
most.
Far far away, behind the word mountains, far from the countries Vokalia and
Consonantia, there live the blind texts.

Separated they live in Bookmarksgrove right at the coast of the Semantics, a large
language ocean. A small river named Duden flows by their place and supplies it with the
necessary regelialia.
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