The Bureau of Internal Revenue issued Revenue Regulation (RR) 4-2025, which introduced amendments to the current list of de minimis benefits enumerated in RR 2-98, as amended by
RR 11-2018.
De minimis benefits pertain to gifts of relatively small value provided by employers to their employees. Generally, if these benefits fall within the legally defined threshold, they are considered nontaxable compensation. As a result, they are exempt from income tax, withholding tax on compensation and fringe benefit tax.
The key amendments, which apply to both private and government employees, refer to the following:
• Increase the maximum amount for uniform and clothing allowance from P6,000 to P7,000 per year.
• Inclusion of cash and gift certificates, as acceptable forms for employee achievement awards, in addition to tangible personal property, with annual monetary value not exceeding P10,000, received by the employee under an established written plan that does not discriminate in favor of highly paid employees.
RR 4-2025 is effective on Feb. 14, 2025, or 15 days from Jan. 30, which is the date of publication.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants