New Year, New Thresholds: Changes in the De Minimis Benefits
The Secretary of the Department of Finance, upon recommendation of the Commissioner of Internal Revenue, has issued Revenue Regulations 29-2025 on 22 December 2025 that focuses on further amending previous regulations (RR No. 2-98 and RR No. 004-2025) to increase the thresholds for tax-exempt "De minimis" benefits. These benefits are considered facilities or privileges of relatively small value and are not subject to income tax on compensation or fringe benefit tax.
The updates cover a wide range of employee perks, including increased allowances for rice, clothing, medical assistance, and laundry, as well as higher limits for monetized leave credits and achievement awards.
Effectivity Date
This revenue was issued on 22 December 2025 and shall be effective fifteen days after its publication in the BIR Website. Therefore, this revenue issuance shall be effective on 6 January 2026.
Comparison Table: Old vs. New De Minimis Thresholds
De Minimis Benefit |
Old Threshold |
New Threshold |
Monetized unused vacation leave credits (Private employees) |
10 days |
12 days |
The monetized value of vacation and sick leave credits paid to government officials and employees |
N/A |
N/A |
Medical cash allowance to dependents |
≤ P1,500 per semester or P250 per month |
≤ P2,000 per semester or P333 per month |
Rice subsidy |
P2,000 or 1 sack (50kg) ≤ P2,000 |
P2,500 or 1 sack (50kg) ≤ P2,500 |
Uniform and clothing allowance |
≤ P7,000 per annum |
≤ P8,000 per annum |
Actual medical assistance |
≤ P10,000 per annum |
≤ P12,000 per annum |
Laundry allowance |
≤ P300 per month |
≤ P400 per month |
Employee’s achievement awards |
≤ P10,000 |
≤ P12,000 |
Gifts (Christmas/Anniversary) |
≤ P5,000 per annum |
≤ P6,000 per annum |
Daily meal allowance (OT/Night shift) |
≤ 25% of basic minimum wage |
≤ 30% of basic minimum wage |
CBA and productivity incentive schemes |
≤ P10,000 per taxable year |
≤ P12,000 per taxable year |
This article was prepared by Morfe, Ceneta & Co., and CPAs for general information only and should not be used as a replacement for expert advice.