“De minimis” benefits are modest, tax-exempt perks offered or furnished by the employer to their employees to promote health, goodwill, contentment, or efficiency of the employees. Recently, the Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 29-2025 increasing the non-taxable thresholds for these “De minimis” benefits, as provided below.
This took effect starting 6 January 2026.
Notable changes
| “De minimis” benefit | New threshold | Old threshold |
| Monetized unused vacation leave credits of private employees | 12 days per year | 10 days per year |
| Monetized value of vacation & sick leave credits for government employees | None. Fully exempt | None. Fully exempt |
| Medical cash allowance for employees’ dependents | ₱2,000 per employee per semester (or ₱4,000 per year) or ₱333 per month | ₱1,500 per employee per semester (or ₱3,000 per year) or ₱250 per month |
| Rice subsidy | ₱2,500 per month or 1 sack of 50kg rice amounting to not more than P2,500.00 | ₱2,000 per month or 1 sack of 50kg rice amounting to not more than P2,000.00 |
| Uniform & clothing allowance | ₱8,000 per year | ₱7,000 per year |
| Actual medical assistance (e.g., medical allowance for medical and healthcare needs, annual medical/executive check-up, maternity assistance and routine consultations) | ₱12,000 per year
| ₱10,000 per year
|
| Laundry allowance | ₱400 per month (or ₱4,800 per year) | ₱300 per month (or ₱3,600 per year) |
| Employee achievement awards, e.g., for length of service or safety achievement | ₱12,000 per year (whether in cash, gift certificate, or any tangible personal property) | ₱10,000 per year (whether in cash, gift certificate, or any tangible personal property) |
| Gifts given during Christmas & major anniversary celebrations | ₱6,000 per employee per year
| ₱5,000 per employee per year
|
| Daily meal allowance for overtime and night/graveyard shift | 30% of the basic minimum wage on a per region basis | 25% of the basic minimum wage on a per region basis
|
| Benefits under Collective Bargaining Agreement (CBA) & productivity incentive scheme | ₱12,000 per employee per year (total combined annual monetary value from CBA and productivity incentive schemes)
| ₱10,000 per employee per year (total combined annual monetary value from CBA and productivity incentive schemes)
|
Other relevant rules
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Geraldine-Esguerra Longa
Tax Partner
Raymund Gutib
Tax Director
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