12. What is  GROSS BENEFITS & DE MINIMIS BENEFITS?
          To reward employee performance and to set incentives it is common for employers to give compensations in cash or in kind to employees. According to the Philippine regulations, these benefits are exempt of taxes under certain conditions.

 

          Following the tax code, benefits received are excluded from the computation of gross income as long as it remains below P82,000. “Gross benefits” include: the 13th month pay, Christmas bonuses, productivity and incentive bonuses, and other benefits of the same nature in cash or in kind.

         

          In addition to that, compensations of small value, called De Minimis Benefits, are also excluded from the computation of gross income. De Minimis Benefits have the purpose to promote the well-being and efficiency of employees and are limited to facilities or privileges of relatively small size.

 

De Minimis Benefits include:
– Monetized unused vacation leave credits, maximum of 10 days per year.
– Medical cash allowance to dependents of employees, maximum of P750 per semester of P125 per month.
– Rice subsidy, up to P1,500.
– Uniform and clothing allowance, up to P5,000 per year.
– Actual medical benefits, up to P10,000 per year.
– Laundry allowance, up to P300 per month.
– Employee achievement awards (loyalty reward, safety reward…) in forms other than cash or gift certificates, and in a maximum value of P10,000 per year in accordance to an established plan which does not discriminate to favour highly paid employees.
– Gifts given for Christmas, special festivities or special circumstances (marriage, illness…) can not be over P5,000 per employee per year.
– Daily meal allowances during overtime work must not exceed 25% of the basic minimum wage.

Meal allowance is non-taxable only for overtime or graveyard shift.
Maximum PHP 120.00 per day based on PHP481.00 (Metro Manila minimum wage – Wage Order No. NCR-19).

– 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 (Php 10,000.00) per employee per taxable year.