Quick answer

Yes—but an excess de minimis benefit is not automatically taxable in full.

For both rank-and-file and managerial or supervisory employees:

The portion within the applicable de minimis ceiling is exempt from income tax, withholding tax on compensation, and fringe benefit tax.
Only the portion above that ceiling is transferred to the employee’s annual “13th-month pay and other benefits” pool.
That pool remains exempt up to a combined ₱90,000 per taxable year.
Only the amount exceeding the ₱90,000 annual limit becomes taxable compensation and is subject to withholding tax.

Thus, if the employee’s 13th-month pay and other benefits have already used the entire ₱90,000 exemption, the full excess over a de minimis ceiling will ordinarily be taxable. The actual additional income tax still depends on the employee’s total taxable income.

This treatment comes from the Tax Code’s ₱90,000 exclusion and the BIR’s express guidance on excess de minimis benefits. See Republic Act No. 10963 and BIR Revenue Memorandum Circular No. 50-2018.

How the two exemptions work

De minimis benefits and the ₱90,000 exclusion are separate layers of tax relief.

First layer: the de minimis ceiling

A qualifying benefit within its own prescribed ceiling is excluded entirely. It does not consume any part of the ₱90,000 exemption.

Second layer: the ₱90,000 annual pool

The following are generally combined in this pool:

13th-month pay;
Christmas, productivity, loyalty, performance and similar bonuses or benefits covered by the Tax Code; and
portions of qualifying de minimis benefits that exceed their respective ceilings.

A practical formula is:

Taxable excess = combined 13th-month pay and other covered benefits − ₱90,000

If the result is zero or negative, none of that combined pool is taxable. This calculation assumes the items truly belong in the statutory “other benefits” category and are not governed by a different exemption or by the fringe benefit tax rules.

Current de minimis ceilings

Under BIR Revenue Regulations No. 29-2025, the current ceilings are:

Benefit	Current exempt ceiling or condition
Monetized unused vacation leave of private employees	Not more than 12 days during the year
Monetized vacation and sick leave of government officials and employees	No separate monetary ceiling stated in the regulation
Medical cash allowance to employees’ dependents	₱2,000 per employee per semester or ₱333 per month
Rice subsidy	₱2,500 per month, or one 50-kilogram sack worth not more than ₱2,500
Uniform and clothing allowance	₱8,000 per year
Actual medical assistance, including qualifying medical allowances, checkups, maternity assistance and routine consultations	₱12,000 per year
Laundry allowance	₱400 per month
Length-of-service or safety achievement awards	₱12,000 per year, under an established written plan that does not favor highly paid employees
Gifts during Christmas and major anniversary celebrations	₱6,000 per employee per year
Daily meal allowance for overtime work or night/graveyard shifts	Not more than 30% of the applicable regional basic minimum wage
Benefits under a collective bargaining agreement and productivity incentive scheme	Combined maximum of ₱12,000 per employee per taxable year

For the overtime or night-shift meal allowance, use the basic minimum wage applicable to the employee’s region and covered establishment. Current wage orders are available from the National Wages and Productivity Commission.

These limits are category-specific. An unused portion of one ceiling should not be treated as extra room under another ceiling.

Rank-and-file and managerial employees: what changes?

Excess from an otherwise qualifying de minimis benefit

The BIR’s specific rule is the same for both groups: the portion within the de minimis ceiling remains exempt, while the excess enters the ₱90,000 “other benefits” pool. Any amount beyond that annual pool is subject to income tax and withholding tax on compensation.

A benefit that does not qualify as de minimis at all

A different analysis applies when the benefit:

is not on the exclusive BIR list;
fails a required condition, such as the written and nondiscriminatory plan for achievement awards; or
has merely been renamed “de minimis” in the payroll records.

For a rank-and-file employee, a non-exempt benefit generally forms part of taxable compensation.

For a managerial or supervisory employee, a benefit outside the de minimis rules may instead be a taxable fringe benefit. The employer generally bears the 35% final fringe benefit tax on the grossed-up monetary value, unless a statutory exception applies. Benefits required by the employer’s business or furnished for the employer’s convenience may be excluded only when the facts and documents support that treatment.

The Supreme Court has emphasized that de minimis benefits are limited to those officially enumerated and that the recipient’s rank and the nature of the benefit must be established. See COURAGE v. Commissioner of Internal Revenue, G.R. No. 213446, July 3, 2018.

Examples

Rank-and-file employee: excess remains exempt

An employee receives:

₱12,000 uniform allowance;
₱70,000 13th-month pay; and
₱10,000 performance bonus.

The current uniform ceiling is ₱8,000:

₱8,000 remains separately exempt as a de minimis benefit.
The ₱4,000 excess enters the other-benefits pool.
The pool is ₱70,000 + ₱10,000 + ₱4,000 = ₱84,000.

Because ₱84,000 does not exceed ₱90,000, the ₱4,000 uniform-allowance excess is still exempt.

Managerial employee: part becomes taxable

A manager receives:

₱3,000 monthly rice subsidy for all 12 months; and
₱100,000 13th-month pay.

The rice-subsidy ceiling is ₱2,500 per month:

₱30,000 remains separately exempt.
The annual excess is ₱6,000.
The other-benefits pool is ₱100,000 + ₱6,000 = ₱106,000.
The amount exceeding ₱90,000 is ₱16,000.

The ₱16,000 becomes taxable compensation. It is not automatically subject to fringe benefit tax merely because the employee is a manager; this example concerns the specific BIR rollover rule for excess amounts from an otherwise qualifying de minimis benefit.

What employees should do

Identify the exact benefit. Check its substance, not merely the description appearing on the payslip.
Apply the correct ceiling. Observe whether the limit is monthly, per semester, annual or based on the employee’s regional minimum wage.
Ask payroll for the annual computation. It should separately show:
- the qualifying de minimis portion;
- the excess over each ceiling;
- 13th-month pay and other covered benefits;
- the portion, if any, above ₱90,000; and
- the resulting withholding tax.
Review BIR Form 2316. Employers must generally furnish it by January 31 of the following year, or when the final compensation is paid if employment ends earlier.
Report previous employment. An employee who transfers during the year should give the new employer a certified BIR Form 2316 from the previous employer so the year-end computation can include prior compensation.
File an annual return when required. Employees with two or more concurrent or successive employers are not qualified for substituted filing. They generally must consolidate their compensation and file BIR Form 1700 by April 15 of the following year. Current forms and filing facilities are available through the BIR eServices portal.

Under Revenue Regulations No. 11-2018, excess compensation tax withheld during the year should generally be credited or refunded by the employer no later than January 25 of the following year. If employment ends before December, the adjustment should be made with the final compensation.

Records to preserve

Employees and employers should retain:

payslips and payroll summaries;
BIR Forms 2316 from all employers;
written benefit policies and employment agreements;
collective bargaining agreements;
leave records and leave-conversion computations;
the written plan and selection records for achievement awards;
HMO, medical-assistance and reimbursement documents;
receipts or proof of the fair value of noncash benefits;
regional wage orders used for overtime or night-shift meal allowances; and
correspondence concerning payroll corrections or year-end adjustments.

Documents are especially important when claiming that a benefit was required by the business or furnished primarily for the employer’s convenience.

Common mistakes

Taxing the entire benefit merely because it exceeded its de minimis ceiling.
Treating the ₱90,000 exemption as a separate allowance for every benefit.
Including the within-ceiling de minimis portion in the ₱90,000 pool.
Assuming every small allowance is de minimis.
Applying old ceilings instead of the amounts under RR No. 29-2025.
Ignoring monthly or semester limits and testing only the annual total.
Using a future, previous or wrong regional minimum wage for meal allowances.
Giving selected managers an unlisted benefit without evaluating fringe benefit tax.
Failing to combine benefits received from successive employers.
Signing BIR Form 2316 without checking the taxable and non-taxable classifications.

When professional help is urgent

Consult a Philippine tax lawyer or qualified tax professional promptly when:

the employee has received a BIR notice, assessment or discrepancy letter;
payroll treated a large noncash or selectively granted managerial benefit as de minimis;
several years of benefits were misclassified;
the employer and employee disagree about managerial, supervisory or rank-and-file status;
prior-employer income was omitted from the annualized computation;
the employer refuses to correct an apparently inaccurate BIR Form 2316;
a claimed employer-convenience exemption lacks supporting records; or
the amount is material enough that fringe benefit tax, withholding tax and income-tax treatment could produce substantially different liabilities.

Frequently asked questions

Does the entire benefit become taxable after its de minimis ceiling is exceeded?

No. For an otherwise qualifying benefit, the portion within the ceiling remains exempt. Only the excess enters the ₱90,000 annual pool.

Is the ₱90,000 limit in addition to every de minimis ceiling?

Yes, but only qualifying de minimis amounts within their ceilings are separately exempt. The ₱90,000 limit applies collectively to 13th-month pay and covered other benefits, including excess de minimis amounts.

Do managers automatically pay fringe benefit tax on excess de minimis benefits?

No. The BIR specifically places an excess from an otherwise qualifying de minimis benefit in the ₱90,000 other-benefits pool. Fringe benefit tax becomes a separate concern when the benefit does not qualify as de minimis or is otherwise a managerial or supervisory fringe benefit.

Can an employer classify any small allowance as de minimis?

No. The official enumeration and its conditions are controlling. A small or well-intentioned benefit is not tax-exempt merely because the employer calls it de minimis.

Is the ₱90,000 limit per employer?

No. It is an annual exclusion for the employee’s covered benefits. Employees with multiple employers must ensure that the amounts are properly consolidated.

What if taxable income remains below ₱250,000?

The amount above the applicable exclusions becomes taxable compensation, but the employee may still have no final income tax due if total taxable income remains within the zero-tax bracket. Payroll withholding and the annual computation must use the employee’s complete taxable compensation.

Official references

This article provides general Philippine legal and tax information, not advice for a particular employee, employer or transaction. Tax treatment may depend on the benefit’s documents, purpose, recipient and manner of payment. Official sources were last checked on July 23, 2026.