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, the following are non-taxable: employee achievement awards (e.g., for length of service or safety), in cash or in kind, under an established written plan that does not discriminate in favour of highly paid employees, up to PHP12,000 per year; and benefits under a CBA and productivity incentive schemes, up to PHP12,000 per year combined. Private sector employees may monetize up to twelve (12) days of unused vacation leave credits without tax consequences.
De minimis benefits within these ceilings are not included in the PHP90,000 exclusion for 13th-month pay and other benefits. Any amount in excess of the de minimis ceilings forms part of ‘other benefits’, and only the total of 13th-month pay and other benefits exceeding PHP90,000 is taxable.