The Philippine Bureau of Internal Revenue (BIR) has raised the non-taxable thresholds for employee de minimis benefits, effective 6 January 2026, under Revenue Regulations (RR) No. 29-2025. De minimis benefits are minor, employer-provided perks that are exempt from income tax, withholding tax on compensation, and fringe benefit tax in the Philippines. These typically include meal allowances, medical cash subsidies, laundry support, and employee achievement awards. The updated limits allow employers to provide enhanced support to employees without creating additional tax liability.
The table below summarises the revised non-taxable ceilings under the new regulations:
| Benefit Category | Previous Ceiling | New Ceiling |
| Uniform and clothing allowance | PHP 7,000 per year | PHP 8,000 per year |
| Rice subsidy | PHP 2,000 per month | PHP 2,500 per month |
| Medical cash allowance for dependents | PHP 1,500 per semester | PHP 2,000 per semester |
| Actual medical assistance (routine consultations, maternity, executive check-ups) | PHP 10,000 per year | PHP 12,000 per year |
| Laundry allowance | PHP 300 per month | PHP 400 per month |
| Employee achievement awards (cash, gift certificates, tangible property) | PHP 10,000 per year | PHP 12,000 per year |
| Christmas and major anniversary gifts | PHP 5,000 per year | PHP 6,000 per year |
| Meal allowances for overtime/night shifts (minimum wage earners) | Up to 25% of basic minimum wage | Up to 30% of basic minimum wage |
| Benefits under collective bargaining agreements and productivity incentives | PHP 10,000 per year | PHP 12,000 per year |
| Unused vacation leave credits for private employees | 10 days per year | 12 days per year |
Employers should review payroll systems and benefit policies to ensure compliance with the updated thresholds. Key considerations include:
The revised limits also support strategic compensation planning, allowing organisations to enhance employee take-home pay while maintaining tax compliance.
For further detailed guidance on payroll, employment law and compliance in the Philippines, visit our Philippines Global Insights on the activpayroll website.
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