BIR Issues Updated De Minimis Benefits Ceiling Under RR No. 29-2025

The Bureau of Internal Revenue (BIR), through Revenue Regulations (RR) No. 29-2025, has officially increased the ceiling for de minimis benefits exempt from income tax and fringe benefits tax. This amendment further updates RR No. 2-98, as previously amended, and provides welcome relief to both employers and employees.

The regulation was issued pursuant to Sections 4, 33, and 244 of the National Internal Revenue Code of 1997, as amended.

What Are De Minimis Benefits?

De minimis benefits are facilities or privileges of relatively small value provided by employers to employees. These benefits are excluded from taxable compensation, provided they do not exceed the ceilings prescribed by the BIR.

Updated De Minimis Benefits Ceiling

(RR No. 29-2025)

Under the new regulation, the following benefits are non-taxable, subject to the updated limits:

Non-Taxable De Minimis Benefits

1. Monetized Unused Vacation Leave (Private Employees)

   • Up to 12 days per year

     
     

2. Monetized Vacation and Sick Leave (Government Employees)

   • Fully exempt

     
     

3. Medical Cash Allowance to Dependents

   • Up to ₱2,000 per semester, or

   • ₱333 per month

     
     

4. Rice Subsidy

   • Up to ₱2,500 per month, or

   • One (1) sack of 50-kg rice per month, not exceeding ₱2,500

     
     

5. Uniform and Clothing Allowance

   • Up to ₱8,000 per year

     
     

6. Actual Medical Assistance(e.g., medical allowance, executive check-ups, maternity assistance, routine consultations)

   • Up to ₱12,000 per year

     
     

7. Laundry Allowance

   • Up to ₱400 per month

     
     

8. Employee Achievement Awards(cash, gift certificates, or tangible personal property under a written plan)

   • Up to ₱12,000 per year

     
     

9. Christmas and Major Anniversary Gifts

   • Up to ₱6,000 per employee per year

     
     

10. Daily Meal Allowance for Overtime or Night/Graveyard Shift

    • Up to 30% of the basic minimum wage, per region

      
      

11. CBA and Productivity Incentive Benefits

    • Combined total not exceeding ₱12,000 per employee per taxable year

Why This Update Matters

The increase in de minimis benefit ceilings allows employers to:

• Provide more meaningful benefits without additional tax exposure

• Improve employee morale and retention

• Optimize tax-efficient compensation structures

For employees, this translates to higher take-home value without increased income tax liability.

Effectivity of RR No. 29-2025

These regulations shall take effect 15 days after publication in either:

• The Official Gazette, or

• The BIR Official Website,

whichever comes first.

Key Takeaway

RR No. 29-2025 reinforces the government’s intent to modernize compensation benefits and align them with current economic realities. Employers are advised to review their existing benefits policies and ensure compliance with the updated thresholds.

When properly implemented, de minimis benefits remain a powerful tax-saving tool for both employers and employees.