Revenue Regulations No. 029-2025

Further amending the “De Minimis” Benefits Provisions of Revenue Regulations (RR) No. 2-98 as Amended, Increasing the Ceiling of Non-Taxable Benefits

Pursuant to Sections 4 and 244 in relation to Section 33 of the Tax Code of 1997, these regulations are hereby promulgated to further amend RR No. 2-98, as amended by RR No. 004-2025, with respect to “De Minimis” benefits which are exempt from income tax on compensation as well as from fringe benefit tax.

Section 1. Section 2.78.1 of RR No. 2-98, as amended by RR No. 004-2025, is hereby further amend to read as follows:

“Section 2.78.1. Withholding of Income Tax on Compensation Income

(A) Compensation Income Defined.

(3) Facilities and privileges of relatively small value

• Monetized unused vacation leave credits of private employees not exceeding twelve (12) days during the year;
• Monetized value of vacation and sick leave credits paid to government officials and employees;
• Medical cash allowance to dependents of employees not exceeding P2,000.00 per employee per semester or P333.00 per month;
• Rice subsidy of P2,500.00 or more (1) sack of 50 kg. rice per month amounting to not more than P2,500.00;
• Uniform and clothing allowance not exceeding P8,000.00 per annum;
• Actual medical assistance, e.g., medical allowance to cover medical and healthcare needs. Annual medical/executive checl-up, maternity assistance, and routine consultations not exceeding P12,000.00 per annum;
• Laundry allowance not exceeding P400.00 per month;
• Employee’s achievement awards, e.g., for length of service or safety achievement, in any form, whether cash, gift certificate, or any tangible personal property, with an annual monetary value or not exceeding P12,000.00 received by the employee under an established written plan which does not discriminate in favor of highly paid employees;
• Gifts given during Christmas and major anniversary celebrations not exceeding P6,000.00 per employee per annum;
• Daily meal allowance for overtime work and night/graveyard shift not exceeding thirty percent (30%) of the basic minimum wage on a per region basis; and
• Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and productivity incentive scheme provided that the total annual monetary combined value received from both CBA and productivity incentive schemes combined do not exceed twelve thousand pesos (12,000.00) per employee per taxable year.

Section 2. REPEALING CLAUSE – All existing rules and regulations and other issuances or parts thereof which are inconsistent with the provisions of these Regulations are hereby amended, modifies or repealed accordingly.

Section 3. EFFECTIVITY – These Regulations shall take effect after fifteen (15) days following its publication in the Official Gazette or in the BIR Official Website, whichever comes first.