RR No. 5-2011: Further amends RR Nos. 2-98 and 3-98, as last amended by RR No. 5-2008, with respect to “De Minimis Benefits”

Key points

1. Leave benefits. Monetized unused vacation leave credits of private employees not exceeding 10 days during the year, and the monetized value of vacation and sick leave credits paid to government officials and employees, are de minimis.
2. Cash allowances. These cover medical cash allowance to dependents not exceeding P 750 per employee per semester or P 125 per month, rice subsidy of P 1,500 or one (1) sack of 50 kg. rice per month amounting to not more than P 1,500, uniform and clothing allowance not exceeding P 4,000 per annum, and laundry allowance not exceeding P 300 per month.
3. Medical assistance and awards. Actual medical assistance not exceeding P 10,000.00 per annum qualifies. Employee achievement awards are covered if in tangible personal property other than cash or gift certificate, worth not more than P 10,000 a year, under an established written plan that does not discriminate in favor of highly paid employees.
4. Gifts and meal allowance. Christmas and major anniversary gifts not exceeding P 5,000 per employee per annum qualify. Daily meal allowance for overtime and night/graveyard shift work qualifies up to 25% of the basic minimum wage per region.
5. Other benefits. Benefits not on the list are not de minimis and are subject to Income Tax and withholding tax on compensation income.

Who is affected

• Managerial and rank and file employees
• Government officials and employees

Deadlines and effectivity

• Applies to income earned starting the year 2011