Quick answer: De minimis benefits are small employee perks that are tax-free in the Philippines within BIR limits. They are not counted in the ₱90,000 ceiling for 13th month pay and other benefits. Since 6 January 2026 (BIR Revenue Regulations 29-2025) the limits are higher: rice ₱2,500 a month, uniform ₱8,000 a year, medical assistance ₱12,000 a year, and more below. See how exempt benefits affect your tax →
What “de minimis” means
De minimis benefits are benefits of relatively small value given for the convenience or welfare of employees. The BIR lists specific categories and a peso limit for each. Within its limit a benefit is exempt from income tax, withholding tax and fringe benefit tax, and does not use up the ₱90,000 allowance for 13th month pay and other benefits.
The 2026 de minimis list and limits
The list below follows BIR Revenue Regulations 29-2025, issued 22 December 2025 and effective 6 January 2026, which amended the rules in RR 2-98 as amended by RR 4-2025.
| Benefit | 2026 tax-exempt limit | Previous limit |
|---|---|---|
| Rice subsidy | ₱2,500 per month, or one 50-kg sack of rice worth up to ₱2,500 | ₱2,000 |
| Uniform and clothing allowance | ₱8,000 per year | ₱7,000 |
| Medical cash allowance to dependents | ₱2,000 per employee per semester (about ₱333 a month) | ₱1,500 |
| Actual medical assistance (check-ups, maternity assistance, routine consultations) | ₱12,000 per year | ₱10,000 |
| Laundry allowance | ₱400 per month | ₱300 |
| Employee achievement awards (length of service, safety), under a written plan | ₱12,000 per year | ₱10,000 |
| Gifts on Christmas and major anniversaries | ₱6,000 per employee per year | ₱5,000 |
| Daily meal allowance for overtime and night or graveyard shift | Up to 30% of the regional basic minimum wage | 25% |
| CBA and productivity incentive schemes (combined) | ₱12,000 per employee per year | ₱10,000 |
| Monetized unused vacation leave (private employees) | Up to 12 days per year | 10 days |
| Monetized vacation and sick leave (government employees) | No limit | No limit |
Limits are set by regulation and can change again, so confirm the current figures with the BIR before relying on them. This page was last checked on 17 October 2026.
How the limits interact with the ₱90,000 ceiling
Two separate exemptions are at work:
- Each de minimis limit. A benefit within its own limit is fully exempt and ignored for the ceiling.
- The ₱90,000 ceiling. It covers 13th month pay, Christmas and other bonuses, productivity incentives, and any de minimis excess.
Example: the excess goes into the ₱90,000 pool
An employee receives:
- Rice subsidy of ₱3,000 a month. Exempt ₱2,500; excess ₱500 × 12 = ₱6,000.
- Uniform allowance of ₱10,000 a year. Exempt ₱8,000; excess ₱2,000.
- 13th month pay of ₱85,000.
Pool = 13th month ₱85,000 + rice excess ₱6,000 + uniform excess ₱2,000 = ₱93,000
Exempt up to ₱90,000
Taxable excess = ₱3,000 → added to taxable incomeIf the employee is in the 20% bracket the extra tax is ₱600. Keeping benefits inside their limits avoids it.
Why it matters for your tax
De minimis benefits lower your taxable income without lowering your take-home. Only taxable compensation goes into the brackets, so correctly excluding them reduces tax. A rice subsidy of ₱2,500 a month is ₱30,000 a year of pay that is never taxed. Employees in the 20% bracket would otherwise lose about ₱6,000 of it to income tax. See how to compute income tax for where exempt items come off, or try the Income Tax Calculator.
Common mistakes
- Treating the whole allowance as exempt. Only the amount up to the limit is exempt; the rest is taxable or counts in the ₱90,000 pool.
- Calling a regular allowance de minimis. A flat monthly “transportation” or “cellphone” allowance is not on the list and is generally taxable compensation, unless it qualifies as a reimbursement of business expenses supported by receipts.
- Using the old limits. Payroll that still caps rice at ₱2,000 or uniforms at ₱7,000 is under-using the 2026 exemption.
- No written plan for achievement awards. The ₱12,000 exemption requires an established written plan that does not discriminate in favor of highly paid employees.
- Overlooking the 12-day leave conversion. The cap on monetized vacation leave for private employees rose from 10 to 12 days.
For employers and HR
Review payroll tables, benefit policies and employee agreements against the 2026 limits, document the plans for awards and incentives, and make sure excess amounts are added to taxable compensation or to the ₱90,000 pool. Remember that fringe benefits for managerial employees are subject to the separate fringe benefit tax.
Related guides
- Income tax in the Philippines: complete guide →
- Is 13th month pay taxable? →
- How to compute income tax →
- How withholding tax works →
Source: Bureau of Internal Revenue (BIR), Revenue Regulations No. 29-2025 (further amending Sec. 2.78.1 of RR 2-98 as amended by RR 4-2025), effective 6 January 2026. The BIR digest was read for the 12-day, 30% and ₱12,000 CBA figures; other peso limits are corroborated by KPMG, PwC and Grant Thornton Philippines summaries of the same regulation. For guidance only.