New De Minimis Benefit Thresholds Under RR No. 29-2025

The Bureau of Internal Revenue has issued Revenue Regulation (RR) No. 29-2025, which amends the de minimis benefits provisions of RR No. 2-98 and raises several non-taxable benefit ceilings. De minimis benefits are defined as facilities and privileges of relatively small value granted to promote employee welfare (RR No. 8-2000). These are furnished or offered by an employer to his employees. These benefits remain excluded from income tax, withholding tax, and fringe benefit tax, regardless of employee rank. It took effect on January 6, 2026. 

Under the amended rules,, the annual uniform and clothing allowance is  non-taxable up to Php 8,000, while the monthly rice subsidy is capped at Php 2,500. The medical cash allowance for dependents of employees has been increased to Php 2,000 per semester, and actual medical assistance for employees, including annual check-ups, routine consultations, and maternity assistance, is exempted up to Php 12,000 per year. The regulation also sets the laundry allowance at Php 400 per month and raises the ceiling for Christmas gifts and major anniversary celebrations to Php 6,000 annually. In addition, employee achievement awards in any form, and benefits granted under a Collective Bargaining Agreement or productivity incentive scheme are non-taxable up to Php 12,000 per year. Private sector employees may monetize up to twelve (12) days of unused vacation leave credits without tax consequences.

Importantly, de minimis benefits granted within these limits are excluded from the Php 90,000 ceiling applicable of other benefits. The exception is on any excess over the Php 90,000 threshold for 13th-month pay and other benefits; these are treated as “other benefits” that are taxable.