De Minimis Benefits under the NIRC
Disclaimer: The article that follow is my personal opinion, intended for discussion purposes only. It should not be construed as official opinion or regulation by any governmental agency that has authority over the matter.
Found this in my inbox:
Remy:
Can you help me understand what is the maximum amount of de minimis that could be extended to employees? What are other tax deductions can an employee have?
Thanks.
The National Internal Revenue Code of 1997 only mentions of De Minimis Benefits as one of the fringe benefits that are not taxable (Section 33.C). No definition whatsoever. As such, no explicit amount was provided for in the law.
Generally, benefits in kind are taxable. However, de minimis benefits, i.e. those of relatively small value and offered or furnished as a means of promoting the health, goodwill, contentment and efficiency of an employee, and those furnished for the convenience of the employer, are exempt.
For how much is that “relatively small value” is judgemental, and any quantifiable amounts are usually included in the P30,000 ceiling for the thirteenth month as exclusion from the gross income.
As regards your second question, I would like to assume you are referring to tax deductions on income derived from an employer-employee relationship. In that case, you can only claim the personal exemption allowed based on your status (single, head of family, married, plus dependents), which is the subject of the amendments contained in RA 9504. Nothing more, nothing less. Why, are you looking for more?
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3 Responses to “De Minimis Benefits under the NIRC”
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hello dear sir, andar here. i enjoy post of yours very much so. i am agree to you. good day.
Comment posted on 11th August 2008
i just want to ask if the “de minimis benefits” are inclusive of the 30,000.00 ceiling of the the 13th month? Like for instance if you’re basic pay is 15,000.00, you can have a de minimis of 15,000.00?
Comment posted on 23rd September 2008
If that benefit is quantifiable and at as such amount (i.e., P15,000 for the whole year), why would you still cover the benefit as “de minimis”. Declare it as an ordinary employee benefit, it should not still be taxable for as long as the total with the 13th month does not exceed P30,000.
Calling it as “de minimis” invites a question from the BIR.
Comment posted on 23rd September 2008