Payroll, HR & labor compliance
De minimis benefits in the Philippines: 2026 ceilings under RR 29-2025
The updated 2026 de minimis benefit ceilings under BIR RR 29-2025: rice subsidy, uniform, laundry, medical, gifts and meal allowance, and how to handle excess.
De minimis benefits are small-value benefits that employers can give employees free of income tax and fringe benefit tax, as long as each stays within the ceiling set by the BIR. Revenue Regulations No. 29-2025, effective January 6, 2026, raised most ceilings. For example, the rice subsidy limit increased from ₱2,000 to ₱2,500 per month, and the uniform and clothing allowance from ₱6,000 to ₱8,000 per year.
Check the official text on the BIR website when you configure payroll. The ceilings below reflect RR 29-2025 as reported in published tax alerts.
2026 de minimis ceilings
| Benefit | Previous ceiling | Ceiling from January 6, 2026 |
|---|---|---|
| Rice subsidy | ₱2,000 per month (or one 50 kg sack worth up to that amount) | ₱2,500 per month (or one 50 kg sack worth up to ₱2,500) |
| Uniform and clothing allowance | ₱6,000 per year | ₱8,000 per year |
| Medical cash allowance to dependents | ₱1,500 per semester | ₱2,000 per semester |
| Actual medical assistance | ₱10,000 per year | ₱12,000 per year |
| Laundry allowance | ₱300 per month | ₱400 per month |
| Employee achievement awards (non-cash, for length of service or safety) | ₱10,000 per year | ₱12,000 per year |
| Christmas and major anniversary gifts | ₱5,000 per year | ₱6,000 per year |
| Meal allowance for overtime and night or graveyard shift | 25% of basic minimum wage | 30% of the regional basic minimum wage |
| CBA and productivity incentive benefits (combined) | ₱10,000 per year | ₱12,000 per year |
| Monetized unused vacation leave (private employees) | 10 days per year | 12 days per year |
How de minimis benefits interact with the ₱90,000 ceiling
A benefit that exceeds its de minimis ceiling does not become fully taxable right away. The excess is first counted as part of "13th month pay and other benefits," which together are exempt up to ₱90,000 a year. Only the amount above ₱90,000 is added to taxable compensation.
Example. An employee receives a rice subsidy of ₱3,000 a month in 2026.
- De minimis portion: ₱2,500 per month, or ₱30,000 for the year, which is exempt.
- Excess: ₱500 per month, or ₱6,000 for the year, counted under other benefits.
- If the employee's 13th month pay and other benefits including this ₱6,000 total ₱80,000, everything is still exempt. If they total ₱96,000, then ₱6,000 is taxable.
This is why the excess needs to be tracked through the year and settled at annualization.
Rules that keep de minimis treatment valid
- Use the listed benefits only. The list is exclusive; other allowances are taxable compensation unless another exemption applies.
- Respect the period. Monthly ceilings apply per month and annual ceilings per year. You generally cannot average a monthly ceiling across months.
- Keep documentation. Policies, receipts or acknowledgment forms help support the treatment in an audit.
- Apply consistently across branches. Group companies should agree on one policy and configure it in payroll once.
Updating payroll for RR 29-2025
Before your next payroll run, check that:
- Your payroll system's de minimis ceilings reflect the new values with an effective date of January 6, 2026.
- Year-to-date tracking for annual items (uniform, medical assistance, gifts, achievement awards, CBA benefits) has the new limits.
- Excess amounts are carried to the "other benefits" bucket so the ₱90,000 exemption is applied correctly.
- Payslips label de minimis items clearly so employees understand which parts are non-taxable.
Configuring de minimis in payroll software
Payroll software should store each de minimis type with its ceiling, period and effective date, split each payment into exempt and excess portions automatically, and roll the excess into other benefits. Cirquolus Payroll supports income adjustments, withholding tax workflows, 13th month pay and annualization within one approval process.
Related reading: 13th month pay computation and withholding tax on compensation.
Frequently asked questions
What is the rice subsidy de minimis limit in 2026?
₱2,500 per month, or one 50 kg sack of rice per month worth not more than ₱2,500, under RR 29-2025 effective January 6, 2026.
Are de minimis benefits taxable?
No, within their ceilings. Amounts above the ceilings count toward the ₱90,000 exemption for 13th month pay and other benefits, and only the excess over ₱90,000 is taxable.
Is a cash allowance for uniforms de minimis?
The uniform and clothing allowance is a listed de minimis benefit up to ₱8,000 per year from January 6, 2026.
Do de minimis benefits count toward 13th month pay?
No. De minimis benefits are not part of basic salary, so they are not included in the 13th month pay computation.
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