De Minimis Benefits in the Philippines: BIR Tax-Free Limits for 2026
De minimis benefits are small, relatively low-value perks that employers give employees tax-free, regardless of rank, up to ceilings the BIR sets for each benefit type. Revenue Regulations No. 29-2025, effective January 6, 2026, raised several of these ceilings for the first time since the TRAIN Law’s implementing RR No. 11-2018 — employers still using the old 2018 limits are under-crediting exempt pay in 2026.
Report Employee Benefits Correctly on Your Alphalist FREE →What counts as a de minimis benefit? #
De minimis benefits are facilities and privileges of relatively small value that employers furnish to employees for their general welfare — items like a rice allowance, uniform allowance, or medical cash assistance — exempt from income tax and withholding tax as long as each stays within its individual BIR ceiling. Unlike the ₱90,000 combined threshold covering 13th month pay and bonuses, each de minimis category has its own separate ceiling.
What changed under RR No. 29-2025? #
RR No. 29-2025 revised the per-category ceilings that had stood since RR No. 11-2018, raising several limits that had not moved in years despite inflation.
| Benefit | Old limit (RR No. 11-2018) | New limit (RR No. 29-2025, effective Jan 6, 2026) |
|---|---|---|
| Rice subsidy | P2,000 per month | P2,500 per month (or one 50-kg sack of rice per month, not exceeding P2,500) |
| Uniform and clothing allowance | P6,000 per year | P8,000 per year |
| Medical cash allowance to dependents | P1,500 per semester (P250/month) | P2,000 per semester (P333/month) |
| Monetized unused vacation leave (private sector, up to 12 days/year) | Exempt | Exempt (unchanged) |
What happens to amounts above the de minimis ceiling? #
An amount exceeding an individual de minimis ceiling is not automatically taxed outright — it first gets tested against the separate ₱90,000 combined exemption that also covers 13th month pay and other bonuses, and only the portion exceeding that combined threshold becomes taxable compensation. See Is 13th Month Pay Taxable? for how that combined threshold works.
A worked example #
An employee receives a ₱2,500 monthly rice subsidy (exactly at the new 2026 ceiling) and a ₱9,000 annual uniform allowance — ₱1,000 over the new ₱8,000 ceiling. The rice subsidy stays fully exempt as de minimis pay. The ₱1,000 uniform excess does not get withheld immediately; instead, it’s added to the employee’s “other benefits” bucket alongside 13th month pay and any bonuses, and only taxed if that combined total pushes past the ₱90,000 threshold for the year.
Summary #
RR No. 29-2025 raised the rice subsidy to ₱2,500 per month, uniform and clothing allowance to ₱8,000 per year, and medical cash allowance to dependents to ₱2,000 per semester, effective January 6, 2026 — the first update to these de minimis ceilings since the TRAIN Law’s RR No. 11-2018. Amounts above each individual ceiling aren’t taxed outright; they flow into the ₱90,000 combined exemption covered in Is 13th Month Pay Taxable?, and ultimately into the employee’s BIR Form 2316 at year-end.