What Counts as "De Minimis"
De minimis benefits are small, facility-type perks employers give on top of salary — things like a rice subsidy, uniform allowance, or a Christmas gift. The BIR exempts these from income tax and withholding tax on compensation, but only if the benefit matches one of the officially listed categories and stays within its peso ceiling. Anything over the ceiling isn't automatically taxed at the full value — only the excess above the limit is added back as taxable income.
Chart shows annualized value of each ceiling (monthly limits × 12) for easy comparison. Rice subsidy shown at its full ₱2,500/month ceiling.
| Benefit | 2026 ceiling |
|---|---|
| Rice subsidy | ₱2,500/month (or 1 sack, 50kg) |
| Uniform and clothing allowance | ₱8,000/year |
| Medical cash allowance to dependents | ₱2,000/semester (≈₱333/month) |
| Actual medical assistance | ₱12,000/year |
| Laundry allowance | ₱400/month |
| Employee achievement awards (tangible property) | ₱12,000/year |
| Christmas / major anniversary gifts | ₱6,000/year per employee |
| Monetized unused vacation leave (private sector) | 12 days/year |
| CBA and productivity incentive schemes (combined) | ₱12,000/year |
| Daily meal allowance (OT / night / graveyard shift) | 25–30% of the regional minimum wage per day |
What Changed in RR No. 29-2025
- Rice subsidy: ₱2,000 → ₱2,500/month
- Uniform/clothing allowance: ₱7,000 → ₱8,000/year
- Laundry allowance: ₱300 → ₱400/month
- Employee achievement awards: ₱10,000 → ₱12,000/year
- Christmas/anniversary gifts: ₱5,000 → ₱6,000/year
- Medical cash allowance to dependents: ₱1,500 → ₱2,000/semester
- Monetized unused vacation leave: 10 → 12 days/year (private sector)
Frequently Asked Questions
What are de minimis benefits?
De minimis benefits are small-value employee perks and allowances that the BIR exempts from income tax and withholding tax on compensation, provided they fall within a specific list and stay within prescribed peso ceilings.
What happens if a benefit exceeds the de minimis ceiling?
Only the excess over the ceiling becomes taxable. For example, if a company gives a ₱3,000/month rice subsidy against a ₱2,500 ceiling, the extra ₱500/month is added to the employee's other benefits and tested against the separate ₱90,000 annual tax-exempt ceiling for 13th month pay and other benefits.
Did de minimis benefit ceilings change for 2026?
Yes. BIR Revenue Regulations No. 29-2025, effective January 6, 2026, raised several ceilings — including rice subsidy (₱2,000 to ₱2,500/month), uniform allowance (₱7,000 to ₱8,000/year), laundry allowance (₱300 to ₱400/month), achievement awards (₱10,000 to ₱12,000/year), and Christmas/anniversary gifts (₱5,000 to ₱6,000/year).
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