The Bureau of Internal Revenue (BIR) released Revenue Regulation (RR) 29-2025 on Dec. 22, 2025, introducing amendments to the maximum amount of de minimis benefits which are exempt from both income tax on compensation as well as fringe benefit tax.
Under the new RR, the revised thresholds are as follows:
a. Monetised unused vacation leave credits of private employees not exceeding 12 days during the year;
b. Monetised value of vacation and sick leave credits paid to government officials and employees;
c. Medical cash allowance to dependents of employees not exceeding P2,000 per employee per semester or P333 per month;
d. Rice subsidy of P2,500 or one sack of 50 kg. rice per month amounting to not more than P2,500;
e. Uniform and clothing allowance not exceeding P8,000 per annum;
f. Actual medical assistance, e.g., medical allowance to cover medical and healthcare needs, annual medical/executive check-up, maternity assistance, and routine consultations not exceeding P12,000 per annum;
g. Laundry allowance not exceeding P400 per month;
h. Employee’s achievement awards, e.g., for length of service or safety achievement, in any form, whether in cash, gift certificate, or any tangible personal property, with an annual monetary value not exceeding P12,000 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
i. Gifts given during Christmas and major anniversary celebrations not exceeding P6,000 per employee per year;
j. Daily meal allowance for overtime work and night/graveyard shift not exceeding 30 percent of the basic minimum wage on a per region basis; and
k. Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme provided that the total annual monetary value received from both CBA and productivity incentive schemes combined do not exceed P12,000 per employee per taxable year.
The updates in this regulation took effect on Jan. 6, 2026.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants