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    De Minimis Benefits

    Uploaded by

    Claudine Sumalinog
    The document discusses "de minimis" benefits provided to employees that are exempt from income taxation. As of 2018, de minimis benefits include up to 10 days of unused vacation leave pay, medical allowances up to P10,000 per year, and meal allowances for overtime up to 25% of the minimum wage. Any benefits beyond these amounts are subject to income tax. Incentives and commissions received from an employer are considered taxable income and subject to withholding tax when added to an employee's regular compensation.

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    De Minimis Benefits

    Uploaded by

    Claudine Sumalinog
    110 views2 pages
    The document discusses "de minimis" benefits provided to employees that are exempt from income taxation. As of 2018, de minimis benefits include up to 10 days of unused vacation leave pay, medical allowances up to P10,000 per year, and meal allowances for overtime up to 25% of the minimum wage. Any benefits beyond these amounts are subject to income tax. Incentives and commissions received from an employer are considered taxable income and subject to withholding tax when added to an employee's regular compensation.

    Original Description:

    As of January 1, 2018 (Based on RMC 50-2018

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    The document discusses "de minimis" benefits provided to employees that are exempt from income taxation. As of 2018, de minimis benefits include up to 10 days of unused vacation leave pay, medical allowances up to P10,000 per year, and meal allowances for overtime up to 25% of the minimum wage. Any benefits beyond these amounts are subject to income tax. Incentives and commissions received from an employer are considered taxable income and subject to withholding tax when added to an employee's regular compensation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    110 views2 pages

    De Minimis Benefits

    Uploaded by

    Claudine Sumalinog
    The document discusses "de minimis" benefits provided to employees that are exempt from income taxation. As of 2018, de minimis benefits include up to 10 days of unused vacation leave pay, medical allowances up to P10,000 per year, and meal allowances for overtime up to 25% of the minimum wage. Any benefits beyond these amounts are subject to income tax. Incentives and commissions received from an employer are considered taxable income and subject to withholding tax when added to an employee's regular compensation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    What are the benefits classified considered as “de minimis”?

    Are there any updates in the amount of “de


    minimis” benefits?

    As of January 1, 2018, the following are the “de minimis” benefits:

    a. Monetized unused vacation leave credits of private employees not exceeding ten (10) days
    during the year;
    b. Monetized value of vacation and sick leave credits paid to government officials and employees;
    c. Medical cash allowance paid to dependents of employees not exceeding P1,500.00 per employee
    per semester or P250.00 per month;
    d. Rice subsidy of P2,000.00 or one (1) sack of 50 kg rice per month amounting to not more than
    P2,000.00;
    e. Uniform and clothing allowance not exceeding P6,000.00 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
    P10,000.00 per annum;
    g. Laundry allowance not exceeding P300.00 per month;
    h. Employees achievement awards, e.g. for length of service or safety achievement, which must be
    in the form of a tangible personal property other than cash or gift certificate, with an annual
    monetary value not exceeding P10,000 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 P5,000.00 per
    employee per annum;
    j. Daily meal allowance for overtime work and night/graveyard shift not exceeding twenty-five
    percent (25%) 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 schemes provided that the total annual monetary value received from both
    CBA and productivity incentive schemes combined do not exceed ten thousand pesos
    (P10,000.00) per employee per taxable year.

    All other benefits given by employers which are not included in the above enumeration shall not be
    considered as “de minimis” benefits and hence shall be subject to income taxation as well as withholding
    tax.

    TAX TREATMENT OF THE DE MINIMIS BENEFITS given to employees which are beyond the prescribed
    amount of benefits:

    The benefits given in excess of the maximum amount allowed as “de minimis” benefits shall be included
    as part of “other benefits” which is subject to the P90,000.00 ceiling. Any amount in excess of the P90,000
    shall be subject to income tax and consequently to the withholding tax on compensation.

    INCENTIVES GIVEN TO EMPLOYEES- TAXABLE?

    YES. In general, any incentives given to employees shall form part of the compensation subject to income
    tax, unless specifically exempted under a special law or incentives are in the nature of the previously
    enumerated “de minimis” benefits.
    TAX TREATMENT of commission given to an employee in addition to the regular compensation received
    from the same employer (income payor/withholding agent)?

    Is the remittance of the withholding tax on commission separate from the tax withheld on compensation?

    The commission received from the same employer shall be considered as supplementary income. It shall
    be added to the regular compensation subject to income tax and consequently to withholding tax using
    the withholding tax table on compensation.

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