The Bureau of Internal Revenue (BIR) has raised the tax-exempt ceilings for de minimis employee benefits under Revenue Regulations No. 29-2025. Effective January 6, 2026, this allows higher support without additional taxes. The change addresses rising living costs and offers employers more flexibility in compensation.
The Bureau of Internal Revenue (BIR) has updated the ceilings for de minimis benefits to better align with current economic realities in the Philippines. These benefits include small non-cash or cash allowances exempt from income and withholding taxes, such as rice subsidies, medical assistance, and clothing allowances, provided they remain within set limits.
Revenue Regulations No. 29-2025, issued in 2025, revises limits across various categories: uniform and clothing allowance, rice subsidy up to P2,000 per month, medical assistance including for dependents, employee achievement awards, Christmas and anniversary gifts, laundry allowance, monetized unused vacation leave for the private sector, collective bargaining agreement and productivity incentives, and overtime or night-shift meal allowances.
"The move updates long-standing limits that many employers and employees say no longer reflect today’s cost of living," the article states. This adjustment increases the real value of employee take-home pay while preserving tax efficiency for companies.
For compliance, experts advise employers to review payroll systems, update internal policies, document benefits granted, and conduct audits. Such steps help avoid issues during BIR assessments.
The change is particularly significant amid inflation, enhancing benefit programs without adding tax burdens. No contradictions in the regulation are noted, and it directly addresses workforce needs.
