9 January 2026
On 22 December 2025, the Bureau of Internal Revenue (BIR) issued Revenue Regulations (RR) No. 029-2025, further amending the “De Minimis” Benefits provisions under RR No. 2-98, as amended. The new regulation increases the ceilings for tax-exempt de minimis benefits granted to employees.
Recommended action
Employers should review their current de minimis benefit policies and update their practices to align with the new ceilings for 2026. The increased thresholds provide an opportunity to enhance employee benefits while maintaining tax efficiency.
In more detail
The following are the updated ceilings for de minimis benefits under RR No. 029-2025:
| Type of De Minimis Benefit | Previous Ceiling | New ceiling (RR No. 029-2025) |
|---|---|---|
| Monetized unused vacation leave credits of private employees | up to 10 days | up to 12 days |
| Monetized value of vacation and sick leave credits paid to government officials and employees | Fully exempt | Fully exempt |
| Medical cash allowance to dependents of employees | Not exceeding PHP 1,500 per semester or PHP 250 per month | Not exceeding PHP 2,000 per semester or PHP 333 per month |
| Rice subsidy | Not exceeding PHP 2,000 per month or one 50kg sack per month amounting to not more than PHP 2,000 | Not exceeding PHP 2,500 per month or one 50kg sack per month amounting to not more than PHP 2,500 |
| Uniform and clothing allowance | Not exceeding PHP 7,000 per year | Not exceeding PHP 8,000 per year |
| 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 PHP 10,000 per year | Not exceeding PHP 12,000 per year |
| Laundry allowance | Not exceeding PHP 300 per month | Not exceeding PHP 400 per month |
| Employee achievement awards, e.g., for length of service or safety achievement, in any form, whether in cash, gift certificate or any tangible personal property, received by the employee under an established written plan that does not discriminate in favor of highly paid employees | Annual monetary value not exceeding PHP 10,000 | Annual monetary value not exceeding PHP 12,000 |
| Gifts during Christmas and major anniversaries | Not exceeding PHP 5,000 per year | Not exceeding PHP 6,000 per year |
| Daily meal allowance for overtime work and night/graveyard shift | Not exceeding 25% of basic minimum wage | Not exceeding 30% of basic minimum wage |
| Benefits received by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme | Total annual monetary value received from both CBA and productivity incentives schemes combined not exceeding PHP 10,000 per employee per taxable year | Total annual monetary value received from both CBA and productivity incentives schemes combined not exceeding PHP 12,000 per employee per taxable year |
The new regulations take effect 15 days after publication in the Official Gazette or on the BIR’s official website, whichever is earlier.