De minimis benefits are small-value perks exempt from income tax and withholding, ignored against the P90,000 cap unless they breach their ceilings.
By the Orkids engineering team · Reviewed against BIR RR No. 29-2025 (de minimis ceilings, in force January 2026), RR 5-2011 as amended, and RR 11-2018 · Updated June 2026
Table of contents
What are de minimis benefits?
De minimis benefits are small-value privileges an employer gives employees as a matter of welfare, courtesy, or efficiency. They are exempt from income tax AND from withholding tax on compensation — both for rank-and-file and managerial/supervisory staff. They are also separate from the fringe benefits tax (FBT) regime.
The governing rule is Revenue Regulations (RR) No. 5-2011, as amended by RR 8-2012, RR 1-2015, RR 11-2018 (which implemented the TRAIN Law, RA 10963), and most recently RR 29-2025, which raised most ceilings effective January 6, 2026. Only the specific items listed in these regulations qualify as de minimis. Anything not on the BIR list does not get de minimis treatment — even if it is small in value.
The list is exclusive. An employer cannot invent its own de minimis category. A benefit outside the list is treated either as taxable compensation (for rank-and-file) or as a fringe benefit subject to FBT (for managerial/supervisory employees).
The 2026 de minimis benefits list and ceilings
Below is the complete BIR list with the prescribed ceilings in force for 2026 under RR 29-2025 (effective January 6, 2026). Amounts given within these ceilings are fully tax-exempt and are not added to the P90,000 13th-month-and-other-benefits cap. Always confirm the current figures against the latest BIR issuance before finalizing payroll, since ceilings can be updated by regulation.
| Benefit | Ceiling (tax-exempt up to) |
|---|---|
| Monetized unused vacation leave credits of private employees | Up to 12 days per year |
| Monetized value of vacation and sick leave credits paid to government officials and employees | No day cap (government employees only) |
| Medical cash allowance to dependents of employees | Up to ₱2,000 per employee per semester (₱333 per month) |
| Rice subsidy | Up to ₱2,500 per month, or one 50-kg sack of rice per month |
| Uniform and clothing allowance | Up to ₱8,000 per year |
| Actual medical assistance (annual medical and healthcare needs) | Up to ₱12,000 per year |
| Laundry allowance | Up to ₱400 per month |
| Employee achievement award in tangible personal property (e.g. for length of service) | Up to ₱12,000 per year |
| Gifts given during Christmas and major anniversary celebrations | Up to ₱6,000 per employee per year |
| Daily meal allowance for overtime work and night or graveyard shift | Up to 30% of the basic minimum wage |
| Benefits under a CBA and productivity incentive schemes (combined) | Up to ₱12,000 per employee per year |
| Category | RR 11-2018 | RR 29-2025 (2026) |
|---|---|---|
| Uniform & clothing | ₱6,000 | ₱8,000 |
| Medical assistance | ₱10,000 | ₱12,000 |
| Achievement awards | ₱10,000 | ₱12,000 |
| Christmas & anniversary gifts | ₱5,000 | ₱6,000 |
| CBA & productivity | ₱10,000 | ₱12,000 |
How the P90,000 ceiling interacts with de minimis benefits
This is the part most payroll teams get wrong. There are two separate exemptions, and they work in sequence.
First, each de minimis benefit is tax-exempt up to its own ceiling above. That exemption has nothing to do with the P90,000 cap — a rice subsidy at P2,500/month is fully exempt and is NOT counted against the P90,000.
Second, the P90,000 ceiling applies to 13th month pay AND 'other benefits' (such as the 14th month, mid-year bonus, productivity bonuses, and similar). Under RR 11-2018 (TRAIN), up to P90,000 of these combined is tax-exempt; the excess is taxable compensation.
The connection between the two: when a de minimis benefit EXCEEDS its prescribed ceiling, the EXCESS is no longer treated as de minimis. That excess is reclassified and added to the employee's 'other benefits,' where it competes for room under the P90,000 cap. If total 13th-month-and-other-benefits (including any de minimis excess) is still within P90,000, the excess remains exempt; once the P90,000 is breached, the portion above it is taxable and subject to withholding.
The order of operations
- Compare each de minimis benefit against its own ceiling. The amount within the ceiling is fully exempt and ignored for the P90,000.
- Take the EXCESS over each ceiling (if any) and move it into 'other benefits.'
- Add that excess to 13th month pay, 14th month, bonuses, and similar 'other benefits.'
- Exempt the first P90,000 of that combined total; the amount above P90,000 is taxable compensation subject to withholding.
Worked example: rice subsidy and 13th month
Suppose an employee receives a rice subsidy of P3,000 per month. The de minimis ceiling is P2,500/month, so P2,500 stays exempt and the P500 monthly excess (P6,000 for the year) becomes 'other benefits.'
Now add their 13th month pay of P40,000 and a productivity bonus of P30,000. Total 'other benefits' = P40,000 + P30,000 + P6,000 (rice excess) = P76,000. Because this is below P90,000, the whole amount — including the rice excess — stays tax-exempt.
Change the bonus to P60,000 instead. Total 'other benefits' = P40,000 + P60,000 + P6,000 = P106,000. The first P90,000 is exempt; the remaining P16,000 is taxable compensation and must be subjected to withholding tax. The portion of the rice subsidy within its P2,500/month ceiling was never part of this computation.
Common mistakes employers make
These errors trigger deficiency assessments during a BIR audit because under-withholding makes the employer (the withholding agent) liable for the tax, surcharges, and interest.
Pitfalls to avoid
- Treating non-listed perks (gym memberships, mobile load, generic 'allowances') as de minimis — they are taxable or subject to FBT.
- Granting a benefit above its ceiling and exempting the whole amount instead of only the ceiling portion.
- Forgetting to roll the excess into 'other benefits' and test it against the P90,000 cap.
- Applying the medical cash allowance monthly equivalent (about P333) and the per-semester cap (P2,000) inconsistently across the year.
- Confusing 'actual medical assistance' (up to P12,000/year, exempt as de minimis) with the 'medical cash allowance to dependents' (P2,000/semester) — they are two different items.
- Giving government-style monetized sick leave to PRIVATE employees — only the 12-day vacation leave monetization is de minimis for private workers; sick leave monetization is not.
- Reporting de minimis amounts as taxable on BIR Form 2316, overstating the employee's tax.
How to apply de minimis benefits correctly in payroll
Getting this right is a payroll-configuration problem, not a once-a-year manual exercise. A correctly set up payroll system tags each pay component, applies the per-benefit ceiling automatically, spills the excess into 'other benefits,' and tests the running total against P90,000.
Setup checklist
- Map every recurring allowance to either a de minimis category, taxable compensation, or a fringe benefit.
- Encode each de minimis ceiling (per month, per semester, or per year) and the basis (e.g., 30% of the applicable minimum wage for meal allowance).
- Automatically split any over-ceiling amount: ceiling portion = exempt; excess = 'other benefits.'
- Accumulate 13th month, bonuses, and de minimis excess year-to-date; exempt up to P90,000, withhold on the rest.
- Reflect the exempt and taxable portions correctly on BIR Form 2316 and the annual alphalist.
- Re-check ceilings and the P90,000 cap whenever BIR issues a new regulation.
De Minimis Benefits in the Philippines (2026 Tax-Exempt List) — frequently asked questions
- What are de minimis benefits in the Philippines?
- They are small-value employee perks, listed exclusively by the BIR, that are exempt from income tax and from withholding tax on compensation. The list comes from RR 5-2011, as amended, with the ceilings most recently raised by RR 29-2025, effective January 6, 2026.
- Did the de minimis ceilings change for 2026?
- Yes. RR No. 29-2025, effective January 6, 2026, raised most ceilings: rice subsidy to P2,500/month, uniform/clothing to P8,000/year, actual medical assistance to P12,000/year, laundry to P400/month, Christmas gifts to P6,000/year, achievement awards and CBA/productivity to P12,000/year, dependent medical cash allowance to P2,000/semester, private-sector vacation-leave monetization to 12 days, and the overtime/night-shift meal allowance to 30% of the basic minimum wage.
- Are de minimis benefits counted against the P90,000 ceiling?
- No, not as long as each benefit stays within its prescribed ceiling. Amounts within the ceiling are fully exempt and ignored for the P90,000 cap. Only the EXCESS over a ceiling is moved into 'other benefits' and tested against the P90,000.
- What happens if a de minimis benefit exceeds its ceiling?
- The portion within the ceiling stays exempt. The excess is reclassified as 'other benefits' and added to 13th month pay and bonuses. The first P90,000 of that combined total is exempt; anything above P90,000 is taxable and subject to withholding.
- Is the rice subsidy a de minimis benefit?
- Yes. Under RR 29-2025, a rice subsidy is de minimis up to P2,500 per month, or one 50-kg sack of rice per month. Any amount above that ceiling is rolled into 'other benefits' for the P90,000 test.
- How much uniform or clothing allowance is tax-exempt in 2026?
- Up to P8,000 per year is exempt as a de minimis benefit under RR 29-2025. Any uniform or clothing allowance beyond P8,000 in a year becomes part of 'other benefits' subject to the P90,000 ceiling.
- Are Christmas gifts to employees taxable?
- Gifts given during Christmas and major anniversary celebrations are de minimis up to P6,000 per employee per year under RR 29-2025. Amounts above P6,000 are treated as 'other benefits' and counted against the P90,000 ceiling.
- Can private-sector employees monetize sick leave tax-free?
- No. For private employees, only monetized unused VACATION leave credits of up to 12 days per year (raised from 10 by RR 29-2025) are de minimis. The no-cap monetization of both vacation and sick leave applies only to government officials and employees.
- What is the meal allowance de minimis ceiling in 2026?
- A daily meal allowance for overtime work and for night or graveyard shifts is de minimis up to 30% of the basic minimum wage under RR 29-2025 (up from 25%). It must be tied to actual overtime or night-shift work, not given as a flat everyday allowance.
- How much medical assistance and dependent medical allowance is exempt?
- Under RR 29-2025, actual medical assistance to the employee is exempt up to P12,000 per year, and the separate medical cash allowance to dependents is exempt up to P2,000 per employee per semester (about P333 per month). These are two different de minimis items.
- Do de minimis benefits apply to managers and supervisors?
- Yes. De minimis benefits within their ceilings are exempt for all employees, rank-and-file and managerial/supervisory alike, and they are not subject to fringe benefits tax. Only amounts in excess of the ceilings can become taxable.
- Where do de minimis benefits appear on BIR Form 2316?
- Exempt de minimis amounts (within ceilings) are reported as non-taxable, while any excess folded into 'other benefits' is reported as part of the 13th-month-and-other-benefits line, exempt up to P90,000 and taxable beyond it.
- Can an employer add its own benefits to the de minimis list?
- No. The BIR list is exclusive. Any benefit not specifically enumerated in RR 5-2011, as amended (including RR 29-2025), is taxable compensation for rank-and-file employees or a fringe benefit subject to FBT for managerial/supervisory employees.
Key terms
- De minimis benefit
- A small-value perk, drawn from an exclusive BIR list, that is exempt from income tax and withholding tax on compensation when given within its prescribed ceiling.
- P90,000 ceiling
- The tax-exempt cap (under RR 11-2018 / TRAIN) on combined 13th month pay and 'other benefits.' Amounts above P90,000 are taxable compensation.
- Other benefits
- Bonuses and similar items (14th month, mid-year and productivity bonuses, plus any de minimis excess) that, together with 13th month pay, are tested against the P90,000 ceiling.
- Excess over ceiling
- The portion of a de minimis benefit above its prescribed limit; it loses de minimis status and is reclassified into 'other benefits' for the P90,000 test.
- Fringe benefits tax (FBT)
- A final tax on certain benefits given to managerial/supervisory employees. De minimis benefits within their ceilings are exempt from FBT.
- RR 5-2011
- The Revenue Regulation that consolidated the de minimis benefits list, later amended by RR 8-2012, RR 1-2015, and RR 11-2018.
- Withholding tax on compensation
- Tax the employer deducts from salaries and remits to the BIR. De minimis benefits within ceilings are excluded from the base; excess over P90,000 is included.
Sources
- Revenue Regulations No. 29-2025 (BIR — updated de minimis benefit ceilings, effective January 2026)
- Revenue Regulations No. 5-2011 (consolidated de minimis benefits list)
- Revenue Regulations No. 8-2012 and No. 1-2015 (amendments adding/adjusting items and ceilings)
- Revenue Regulations No. 11-2018 (TRAIN Law implementing rules; P90,000 ceiling on 13th month and other benefits)
- Republic Act No. 10963 (TRAIN Law) and the National Internal Revenue Code, as amended
- Bureau of Internal Revenue (BIR) — official guidance on de minimis benefits and BIR Form 2316