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1.2.4.

It shall be mandatory for the NLRC to conduct continuous hearings


and decide any dispute arising under this Section within twenty (20)
Section 4. (c) Exempted from the provisions of this Act are household calendar days from the time said dispute is formally submitted to it for
or domestic helpers and persons employed in the personal service of arbitration. The pendency of a dispute arising from a wage distortion
another, including family drivers. shall not in any way delay the applicability of the increase in the wage
rates prescribed under this Section.
Retail/service establishments regularly employing not more than ten
(10) workers may be exempted from the applicability of this Act upon
application with and as determined by the appropriate Regional Board 1.2.5
in accordance with the applicable rules and regulations issued by the
Commission. Whenever an application for exemption has been duly REPUBLIC ACT NO. 8188 AN ACT INCREASING THE
filed with the appropriate Regional Board, action on any complaint for PENALTY AND INCREASING DOUBLE INDEMNITY FOR
alleged non-compliance with this Act shall be deferred pending VIOLATION OF THE PRESCRIBED INCREASES OR
resolution of the application for exemption by the appropriate Regional ADJUSTMENT IN THE WAGE RATES, AMENDING FOR THE
Board. PURPOSE SECTION TWELVE OF REPUBLIC ACT NUMBERED
SIXTY-SEVEN HUNDRED TWENTY-SEVEN, OTHERWISE
In the event that applications for exemptions are not granted, KNOWN AS THE WAGE RATIONALIZATION ACT
employees shall receive the appropriate compensation due them as
provided for by this Acretroactive to the effectivity of this Act. "Section 12. Any person, corporation, trust, firm, partnership,
association or entity which refuses or fails to pay any of the prescribed
(d) If expressly provided for and agreed upon in the collective increases or adjustments in the wage rates made in accordance with
bargaining agreements, all increases in the daily basic wage rates this Act shall be punished by a fine not less than Twentyfive thousand
granted by the employers three (3) months before the effectivity of this pesos (P25,000) nor more than One hundred thousand pesos
Act shall be credited as compliance with the increases in the wage (P100,000) or imprisonment of not less than two (2) years nor more
rates prescribed herein, provided that, where such increases are less than four (4) years, or both such fine and imprisonment at the
than the prescribed increases in the wage rates under this Act, the discretion of the court: Provided, That any person convicted under this
employer shall pay the difference. Such increases shall not include Act shall not be entitled to the benefits provided for under the
anniversary wage increases, merit wage increases and those resulting Probation Law. "The employer concerned shall be ordered to pay an
from the regularization or promotion of employees. amount equivalent to double the unpaid benefits owing to the
employees: Provided, That payment of indemnity shall not absolve the
Where the application of the increases in the wage rates under this employer from the criminal liability imposable under this Act. "If the
Section results in distortions as defined under existing laws in the violation is committed by a corporation, trust or firm, partnership,
wage structure within an establishment and gives rise to a dispute association or any other entity the penalty of imprisonment shall be
therein, such dispute shall first be settled voluntarily between the imposed upon the entity's responsible officers, including, but not
parties and in the event of a deadlock, the same shall be finally limited to, the president, vice-president, chief executive officer,
resolved through compulsory arbitration by the regional branches of general manager, managing director or partner."
the National Labor Relations Commission (NLRC) having jurisdiction
over the workplace. WAGE ORDER NCR-20
HOURS OF WORK NIGHT SHIFT OT: Rest periods of short duration during working hours shall be counted
as hours worked.
Art. 82. Coverage. The provisions of this Title shall apply to
employees in all establishments and undertakings whether for profit or Art. 85. Meal periods. Subject to such regulations as the Secretary of
not, but not to government employees, managerial employees, field Labor may prescribe, it shall be the duty of every employer to give his
personnel, members of the family of the employer who are dependent employees not less than sixty (60) minutes time-off for their regular
on him for support, domestic helpers, persons in the personal service meals.
of another, and workers who are paid by results as determined by the Art. 86. Night shift differential. Every employee shall be paid a night
Secretary of Labor in appropriate regulations. shift differential of not less than ten percent (10%) of his regular wage
As used herein, "managerial employees" refer to those whose primary for each hour of work performed between ten oclock in the evening
duty consists of the management of the establishment in which they and six oclock in the morning.
are employed or of a department or subdivision thereof, and to other
officers or members of the managerial staff. Art. 87. Overtime work. Work may be performed beyond eight (8)
"Field personnel" shall refer to non-agricultural employees who hours a day provided that the employee is paid for the overtime work,
regularly perform their duties away from the principal place of an additional compensation equivalent to his regular wage plus at least
business or branch office of the employer and whose actual hours of twenty-five percent (25%) thereof. Work performed beyond eight
work in the field cannot be determined with reasonable certainty. hours on a holiday or rest day shall be paid an additional compensation
equivalent to the rate of the first eight hours on a holiday or rest day
Art. 83. Normal hours of work. The normal hours of work of any plus at least thirty percent (30%) thereof.
employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at Art. 88. Undertime not offset by overtime. Undertime work on any
least one million (1,000,000) or in hospitals and clinics with a bed particular day shall not be offset by overtime work on any other day.
capacity of at least one hundred (100) shall hold regular office hours Permission given to the employee to go on leave on some other day of
for eight (8) hours a day, for five (5) days a week, exclusive of time for the week shall not exempt the employer from paying the additional
meals, except where the exigencies of the service require that such compensation required in this Chapter.
personnel work for six (6) days or forty-eight (48) hours, in which
case, they shall be entitled to an additional compensation of at least Art. 89. Emergency overtime work. Any employee may be required
thirty percent (30%) of their regular wage for work on the sixth day. by the employer to perform overtime work in any of the following
For purposes of this Article, "health personnel" shall include resident cases:
physicians, nurses, nutritionists, dietitians, pharmacists, social 1. When the country is at war or when any other national or local
workers, laboratory technicians, paramedical technicians, emergency has been declared by the National Assembly or the
psychologists, midwives, attendants and all other hospital or clinic Chief Executive;
personnel.
2. When it is necessary to prevent loss of life or property or in
Art. 84. Hours worked. Hours worked shall include (a) all time case of imminent danger to public safety due to an actual or
during which an employee is required to be on duty or to be at a impending emergency in the locality caused by serious
prescribed workplace; and (b) all time during which an employee is accidents, fire, flood, typhoon, earthquake, epidemic, or other
suffered or permitted to work. disaster or calamity;
3. When there is urgent work to be performed on machines, (2) They customarily and regularly direct the work of two or more
installations, or equipment, in order to avoid serious loss or employees therein.
damage to the employer or some other cause of similar nature; (3) They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendations as to hiring and firing and as to
4. When the work is necessary to prevent loss or damage to the promotion or any other change of status of other employees, are
perishable goods; and given particular weight.
(c) Officers or members of a managerial staff if they perform the
5. Where the completion or continuation of the work started following duties and responsibilities:
before the eighth hour is necessary to prevent serious (1) The primary duty consists of the performance of work directly
obstruction or prejudice to the business or operations of the related to management policies of their employer;
employer. (2) Customarily and regularly exercise discretion and independent
Any employee required to render overtime work under this Article judgment; and
shall be paid the additional compensation required in this Chapter. (3) (i) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
Art. 90. Computation of additional compensation. For purposes of establishment in which he is employed or subdivision thereof; or (ii)
computing overtime and other additional remuneration as required by execute under general supervision work along specialized or technical
this Chapter, the "regular wage" of an employee shall include the cash lines requiring special training, experience, or knowledge; or (iii)
wage only, without deduction on account of facilities provided by the execute, under general supervision, special assignments and tasks; and
employer. (4) Who do not devote more than 20 percent of their hours worked in a
work week to activities which are not directly and closely related to
OMNIBUS RULES IMPLEMENTING LABOR CODE 3 the performance of the work described in paragraphs (1), (2) and (3)
above.
RULE I (d) Domestic servants and persons in the personal service of another if
Hours of Work they perform such services in the employer's home which are usually
SECTION 1. General statement on coverage. The provisions of this necessary or desirable for the maintenance and enjoyment thereof, or
Rule shall apply to all employees in all establishments and minister to the personal comfort, convenience, or safety of the
undertakings, whether operated for profit or not, except to those employer as well as the members of his employer's household.
specifically exempted under Section 2 hereof. (e) Workers who are paid by results, including those who are paid on
piece-work, "takay," "pakiao" or task basis, and other non-time work if
SECTION 2. Exemption. The provisions of this Rule shall not their output rates are in accordance with the standards prescribed under
apply to the following persons if they qualify for exemption under the Section 8, Rule VII, Book Three of these regulations, or where such
conditions set forth herein: rates have been fixed by the Secretary of Labor and Employment in
(a) Government employees whether employed by the National accordance with the aforesaid Section.
Government or any of its political subdivision, including those (f) Non-agricultural field personnel if they regularly perform their
employed in government-owned and/or controlled corporations; duties away from the principal or branch office or place of business of
(b) Managerial employees, if they meet all of the following conditions: the employer and whose actual hours of work in the field cannot be
(1) Their primary duty consists of the management of the determined with reasonable certainty.
establishment in which they are employed or of a department or sub-
division thereof.
SECTION 3. Hours worked. The following shall be considered as with company officials where he may be reached is not working while
compensable hours worked: on call.
(a) All time during which an employee is required to be on duty or to
be at the employer's premises or to be at a prescribed work place; and SECTION 6. Lectures, meetings, training programs. Attendance at
(b) All time during which an employee is suffered or permitted to lectures, meetings, training programs, and other similar activities shall
work. not be counted as working time if all of the following conditions are
met:
SECTION 4. Principles in determining hours worked. The (a) Attendance is outside of the employee's regular working hours;
following general principles shall govern in determining whether the (b) Attendance is in fact voluntary; and
time spent by an employee is considered hours worked for purposes of (c) The employee does not perform any productive work during such
this Rule: attendance.
(a) All hours are hours worked which the employee is required to give
his employer, regardless of whether or not such hours are spent in SECTION 7. Meal and Rest Periods. Every employer shall give his
productive labor or involve physical or mental exertion. employees, regardless of sex, not less than one (1) hour time-off for
(b) An employee need not leave the premises of the work place in regular meals, except in the following cases when a meal period of not
order that his rest period shall not be counted, it being enough that he less than twenty (20) minutes may be given by the employer provided
stops working, may rest completely and may leave his work place, to that such shorter meal period is credited as compensable hours worked
go elsewhere, whether within or outside the premises of his work of the employee:
place. (a) Where the work is non-manual work in nature or does not involve
(c) If the work performed was necessary, or it benefited the employer, strenuous physical exertion;
or the employee could not abandon his work at the end of his normal (b) Where the establishment regularly operates not less than sixteen
working hours because he had no replacement, all time spent for such (16) hours a day;
work shall be considered as hours worked, if the work was with the (c) In case of actual or impending emergencies or there is urgent work
knowledge of his employer or immediate supervisor. to be performed on machineries, equipment or installations to avoid
(d) The time during which an employee is inactive by reason of serious loss which the employer would otherwise suffer; and
interruptions in his work beyond his control shall be considered (d) Where the work is necessary to prevent serious loss of perishable
working time either if the imminence of the resumption of work goods.
requires the employee's presence at the place of work or if the interval Rest periods or coffee breaks running from five (5) to twenty (20)
is too brief to be utilized effectively and gainfully in the employee's minutes shall be considered as compensable working time.
own interest. SECTION 8. Overtime pay. Any employee covered by this Rule
who is permitted or required to work beyond eight (8) hours on
SECTION 5. Waiting time. (a) Waiting time spent by an employee ordinary working days shall be paid an additional compensation for the
shall be considered as working time if waiting is an integral part of his overtime work in the amount equivalent to his regular wage plus at
work or the employee is required or engaged by the employer to wait. least twenty-five percent (25%) thereof.
(b) An employee who is required to remain on call in the employer's
premises or so close thereto that he cannot use the time effectively and SECTION 9. Premium and overtime pay for holiday and rest day
gainfully for his own purpose shall be considered as working while on work. (a) Except employees referred to under Section 2 of this
call. An employee who is not required to leave word at his home or Rule, an employee who is permitted or suffered to work on special
holidays or on his designated rest days not falling on regular holidays,
shall be paid with an additional compensation as premium pay of not In cases not falling within any of these enumerated in this Section, no
less than thirty percent (30%) of his regular wage. For work performed employee may be made to work beyond eight hours a day against his
in excess of eight (8) hours on special holidays and rest days not will.
falling on regular holidays, an employee shall be paid an additional
compensation for the overtime work equivalent to his rate for the first RULE I-A
eight hours on a special holiday or rest day plus at least thirty percent Hours of Work of Hospital and Clinic Personnel
(30%) thereof.
(b) Employees of public utility enterprises as well as those employed SECTION 1. General statement on coverage. This Rule shall apply
in non-profit institutions and organizations shall be entitled to the to:
premium and overtime pay provided herein, unless they are (a) All hospitals and clinics, including those with a bed capacity of less
specifically excluded from the coverage of this Rule as provided in than one hundred (100) which are situated in cities or municipalities
Section 2 hereof. with a population of one million or more; and
(c) The payment of additional compensation for work performed on (b) All hospitals and clinics with a bed capacity of at least one hundred
regular holidays shall be governed by Rule IV, Book Three, of these (100), irrespective of the size of the population of the city or
Rules. municipality where they may be situated.

SECTION 10. Compulsory overtime work. In any of the following SECTION 2. Hospitals or clinics within the meaning of this Rule.
cases, an employer may require any of his employees to work beyond The terms "hospitals" and "clinics" as used in this Rule shall mean a
eight (8) hours a day, provided that the employee required to render place devoted primarily to the maintenance and operation of facilities
overtime work is paid the additional compensation required by these for the diagnosis, treatment and care of individuals suffering from
regulations: illness, disease, injury, or deformity, or in need of obstetrical or other
(a) When the country is at war or when any other national or local medical and nursing care. Either term shall also be construed as any
emergency has been declared by Congress or the Chief Executive; institution, building, or place where there are installed beds, or cribs,
(b) When overtime work is necessary to prevent loss of life or or bassinets for twenty-four (24) hours use or longer by patients in the
property, or in case of imminent danger to public safety due to actual treatment of disease, injuries, deformities, or abnormal physical and
or impending emergency in the locality caused by serious accident, mental states, maternity cases or sanitorial care; or infirmaries,
fire, floods, typhoons, earthquake, epidemic or other disaster or nurseries, dispensaries, and such other similar names by which they
calamities; may be designated.
(c) When there is urgent work to be performed on machines,
installations, or equipment, in order to avoid serious loss or damage to SECTION 3. Determination of bed capacity and population. (a) For
the employer or some other causes of similar nature; purposes of determining the applicability of this Rule, the actual bed
(d) When the work is necessary to prevent loss or damage to capacity of the hospital or clinic at the time of such determination shall
perishable goods; be considered, regardless of the actual or bed occupancy. The bed
(e) When the completion or continuation of work started before the 8th capacity of hospital or clinic as determined by the Bureau of Medical
hour is necessary to prevent serious obstruction or prejudice to the Services pursuant to Republic Act No. 4226, otherwise known as the
business or operations of the employer; or Hospital Licensure Act, shall prima facie be considered as the actual
(f) When overtime work is necessary to avail of favorable weather or bed capacity of such hospital or clinic.
environmental conditions where performance or quality of work is
dependent thereon.
(b) The size of the population of the city or municipality shall be
determined from the latest official census issued by the Bureau of the SECTION 8. Hours worked. In determining the compensable hours
Census and Statistics. of work of hospital and clinic personnel covered by this Rule, the
pertinent provisions of Rule 1 of this Book shall apply.
SECTION 4. Personnel covered by this Rule. This Rule applies to
all persons employed by any private or public hospital or clinic SECTION 9. Additional compensation. Hospital and clinic
mentioned in Section 1 hereof, and shall include, but not limited to, personnel covered by this Rule, with the exception of those employed
resident physicians, nurses, nutritionists, dieticians, pharmacists, social by the Government, shall be entitled to an additional compensation for
workers, laboratory technicians paramedical technicians, work performed on regular and special holidays and rest days as
psychologists, midwives, and attendants. provided in this Book. Such employees shall also be entitled to
overtime pay for services rendered in excess of forty hours a week, or
SECTION 5. Regular working hours. The regular working hours of in excess of eight hours a day, whichever will yield the higher
any person covered by this Rule shall not be more than eight (8) hours additional compensation to the employee in the work week.
in any one day nor more than forty (40) hours in any one week.
SECTION 10. Relation to Rule I. All provisions of Rule I of this
For purposes of this Rule a "day" shall mean a work day of twenty- Book which are not inconsistent with this Rule shall be deemed
four (24) consecutive hours beginning at the same time each calendar applicable to hospital and clinic personnel.
year. A "week" shall mean the work of 168 consecutive hours, or
seven consecutive 24-hour work days, beginning at the same hour and RULE II
on the same calendar day each calendar week. Night Shift Differential
SECTION 1. Coverage. This Rule shall apply to all employees
SECTION 6. Regular working days. The regular working days of except:
covered employees shall not be more than five days in a work week. (a) Those of the government and any of its political subdivisions,
The work week may begin at any hour and on any day, including including government-owned and/or controlled corporations;
Saturday or Sunday, designated by the employer. (b) Those of retail and service establishments regularly employing not
more than five (5) workers;
Employers are not precluded from changing the time at which the (c) Domestic helpers and persons in the personal service of another;
work day or work week begins, provided that the change is not (d) Managerial employees as defined in Book Three of this Code;
intended to evade the requirements of this Rule. (e) Field personnel and other employees whose time and performance
is unsupervised by the employer including those who are engaged on
SECTION 7. Overtime work. Where the exigencies of the service task or contract basis, purely commission basis, or those who are paid
so require as determined by the employer, any employee covered by a fixed amount for performing work irrespective of the time consumed
this Rule may be scheduled to work for more than five (5) days or in the performance thereof.
forty (40) hours a week, provided that the employee is paid for the
overtime work an additional compensation equivalent to his regular SECTION 2. Night shift differential. An employee shall be paid
wage plus at least thirty percent (30%) thereof, subject to the night shift differential of no less than ten per cent (10%) of his regular
provisions of this Book on the payment of additional compensation for wage for each hour of work performed between ten o'clock in the
work performed on special and regular holidays and on rest evening and six o'clock in the morning.
days.cralaw
SECTION 3. Additional compensation. Where an employee is Section 12. Lactation Periods - Nursing employees are entitled to
permitted or suffered to work on the period covered after his work break intervals in addition to the regular time-off for meals to
schedule, he shall be entitled to his regular wage plus at least twenty- breastfeed or express milk. The employee shall noti$ their immediate
five per cent (25%) and an additional amount of no less than ten per supervisor before leaving their station. These intervals which include
cent (10%) of such overtime rate for each hour or work performed the time it takes an employee to get to and from the workplace
between 10 p.m. to 6 a.m. lactation station shall be counted as compensable hours worked. The
DOLE may adjust the same but in no case shall such intervals be less
SECTION 4. Additional compensation on scheduled rest day/special than 40 minutes for every 8- hour working period. Duration and
holiday. An employee who is required or permitted to work on the frequency of breaks may be agreed upon by employees and employers
period covered during rest days and/or special holidays not falling on with the minimum being 40 minutes. Usually, there could be2-3
regular holidays, shall be paid a compensation equivalent to his regular breastmilk expressions lasting to l5-30 minutes each within a workday.
wage plus at least thirty (30%) per cent and an additional amount of
not less than ten (10%) per cent of such premium pay rate for each HOLIDAYS AND LEAVES ETC:
hour of work performed.
RATES:
SECTION 5. Additional compensation on regular holidays. For
work on the period covered during regular holidays, an employee shall Chapter II
be entitled to his regular wage during these days plus an additional WEEKLY REST PERIODS
compensation of no less than ten (10%) per cent of such premium rate
for each hour of work performed. Art. 91. Right to weekly rest day.
1. It shall be the duty of every employer, whether operating for
SECTION 6. Relation to agreements. Nothing in this Rule shall profit or not, to provide each of his employees a rest period of
justify an employer in withdrawing or reducing any benefits, not less than twenty-four (24) consecutive hours after every six
supplements or payments as provided in existing individual or (6) consecutive normal work days.
collective agreements or employer practice or policy.
2. The employer shall determine and schedule the weekly rest day
RA 10028: Expanded Breastfeeding Promotion Act of 2009 of his employees subject to collective bargaining agreement
and to such rules and regulations as the Secretary of Labor and
Sec. 12. Lactation Periods. - Nursing employees shall granted break Employment may provide. However, the employer shall
intervals in addition to the regular time-off for meals to breastfeed or respect the preference of employees as to their weekly rest day
express milk. These intervals, which shall include the time it takes an when such preference is based on religious grounds.
employee to get to and from the workplace lactation station, shall be
counted as compensable hours worked. The Department of Labor and Art. 92. When employer may require work on a rest day. The
Employment (DOLE) may adjust the same: Provided, That such employer may require his employees to work on any day:
intervals shall not be less than a total of forty (40) minutes for every 1. In case of actual or impending emergencies caused by serious
eight (8)-hour working period. accident, fire, flood, typhoon, earthquake, epidemic or other
disaster or calamity to prevent loss of life and property, or
IRR imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, premium pay than that prescribed under this Article, the
equipment, or installation, to avoid serious loss which the employer shall pay such higher rate.
employer would otherwise suffer;
Chapter III
3. In the event of abnormal pressure of work due to special HOLIDAYS, SERVICE INCENTIVE LEAVES AND SERVICE
circumstances, where the employer cannot ordinarily be CHARGES
expected to resort to other measures;
Art. 94. Right to holiday pay.
4. To prevent loss or damage to perishable goods; 1. Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments
5. Where the nature of the work requires continuous operations regularly employing less than ten (10) workers;
and the stoppage of work may result in irreparable injury or
loss to the employer; and 2. The employer may require an employee to work on any holiday
but such employee shall be paid a compensation equivalent to
6. Under other circumstances analogous or similar to the twice his regular rate; and
foregoing as determined by the Secretary of Labor and
Employment. 3. As used in this Article, "holiday" includes: New Years Day,
Maundy Thursday, Good Friday, the ninth of April, the first of
Art. 93. Compensation for rest day, Sunday or holiday work. May, the twelfth of June, the fourth of July, the thirtieth of
1. Where an employee is made or permitted to work on his November, the twenty-fifth and thirtieth of December and the
scheduled rest day, he shall be paid an additional compensation day designated by law for holding a general election.
of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for Art. 95. Right to service incentive leave.
work performed on Sunday only when it is his established rest 1. Every employee who has rendered at least one year of service
day. shall be entitled to a yearly service incentive leave of five days
2. When the nature of the work of the employee is such that he with pay.
has no regular workdays and no regular rest days can be
scheduled, he shall be paid an additional compensation of at 2. This provision shall not apply to those who are already
least thirty percent (30%) of his regular wage for work enjoying the benefit herein provided, those enjoying vacation
performed on Sundays and holidays. leave with pay of at least five days and those employed in
3. Work performed on any special holiday shall be paid an establishments regularly employing less than ten employees or
additional compensation of at least thirty percent (30%) of the in establishments exempted from granting this benefit by the
regular wage of the employee. Where such holiday work falls Secretary of Labor and Employment after considering the
on the employees scheduled rest day, he shall be entitled to an viability or financial condition of such establishment.
additional compensation of at least fifty per cent (50%) of his
regular wage. 3. The grant of benefit in excess of that provided herein shall not
4. Where the collective bargaining agreement or other applicable be made a subject of arbitration or any court or administrative
employment contract stipulates the payment of a higher action.
Art. 96. Service charges. All service charges collected by hotels, conspicuously in the work place at least one week before it becomes
restaurants and similar establishments shall be distributed at the rate of effective.
eighty-five percent (85%) for all covered employees and fifteen (b) Where the rest period is not granted to all employees
percent (15%) for management. The share of the employees shall be simultaneously and collectively, the employer shall make known to the
equally distributed among them. In case the service charge is employees their respective schedules of weekly rest through written
abolished, the share of the covered employees shall be considered notices posted conspicuously in the work place at least one week
integrated in their wages. before they become effective.

RULE III SECTION 6. When work on rest day authorized. An employer may
Weekly Rest Periods require any of his employees to work on his scheduled rest day for the
SECTION 1. General statement on coverage. This Rule shall apply duration of the following emergencies and exceptional conditions:
to all employers whether operating for profit or not, including public (a) In case of actual or impending emergencies caused by serious
utilities operated by private persons. accident, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity, to prevent loss of life or property, or in cases of force
SECTION 2. Business on Sundays/Holidays. All establishments majeure or imminent danger to public safety;
and enterprises may operate or open for business on Sundays and (b) In case of urgent work to be performed on machineries, equipment
holidays provided that the employees are given the weekly rest day or installations to avoid serious loss which the employer would
and the benefits as provided in this Rule. otherwise suffer;
(c) In the event of abnormal pressure of work due to special
SECTION 3. Weekly rest day. Every employer shall give his circumstances, where the employer cannot ordinarily be expected to
employees a rest period of not less than twenty-four (24) consecutive resort to other measures;
hours after every six consecutive normal work days. (d) To prevent serious loss of perishable goods;
(e) Where the nature of the work is such that the employees have to
SECTION 4. Preference of employee. The preference of the work continuously for seven (7) days in a week or more, as in the case
employee as to his weekly day of rest shall be respected by the of the crew members of a vessel to complete a voyage and in other
employer if the same is based on religious grounds. The employee similar cases; and
shall make known his preference to the employer in writing at least (f) When the work is necessary to avail of favorable weather or
seven (7) days before the desired effectivity of the initial rest day so environmental conditions where performance or quality of work is
preferred. dependent thereon.
Where, however, the choice of the employee as to his rest day based No employee shall be required against his will to work on his
on religious grounds will inevitably result in serious prejudice or scheduled rest day except under circumstances provided in this
obstruction to the operations of the undertaking and the employer Section: Provided, However, that where an employee volunteers to
cannot normally be expected to resort to other remedial measures, the work on his rest day under other circumstances, he shall express such
employer may so schedule the weekly rest day of his choice for at least desire in writing, subject to the provisions of Section 7 hereof
two (2) days in a month. regarding additional compensation.

SECTION 5. Schedule of rest day. (a) Where the weekly rest is SECTION 7. Compensation on rest day/Sunday/holiday. (a) Except
given to all employees simultaneously, the employer shall make those employees referred to under Section 2, Rule I, Book Three, an
known such rest period by means of a written notice posted employee who is made or permitted to work on his scheduled rest day
shall be paid with an additional compensation of at least 30% of his (a) Those of the government and any of the political subdivision,
regular wage. An employee shall be entitled to such additional including government-owned and controlled corporation;
compensation for work performed on a Sunday only when it is his (b) Those of retail and service establishments regularly employing less
established rest day. than ten (10) workers;
(b) Where the nature of the work of the employee is such that he has (c) Domestic helpers and persons in the personal service of another;
no regular work days and no regular rest days can be scheduled, he (d) Managerial employees as defined in Book Three of the Code;
shall be paid an additional compensation of at least 30% of his regular (e) Field personnel and other employees whose time and performance
wage for work performed on Sundays and holidays. is unsupervised by the employer including those who are engaged on
(c) Work performed on any special holiday shall be paid with an task or contract basis, purely commission basis, or those who are paid
additional compensation of at least 30% of the regular wage of the a fixed amount for performing work irrespective of the time consumed
employees. Where such holiday work falls on the employee's in the performance thereof.
scheduled rest day, he shall be entitled to additional compensation of
at least 50% of his regular wage. SECTION 2. Status of employees paid by the month. Employees
(d) The payment of additional compensation for work performed on who are uniformly paid by the month, irrespective of the number of
regular holiday shall be governed by Rule IV, Book Three, of these working days therein, with a salary of not less than the statutory or
regulations. established minimum wage shall be paid for all days in the month
(e) Where the collective bargaining agreement or other applicable whether worked or not.
employment contract stipulates the payment of a higher premium pay For this purpose, the monthly minimum wage shall not be less than the
than that prescribed under this Section, the employer shall pay such statutory minimum wage multiplied by 365 days divided by twelve.
higher rate.
SECTION 3. Holiday Pay. Every employer shall pay his employees
SECTION 8. Paid-off days. Nothing in this Rule shall justify an their regular daily wage for any worked regular holidays.
employer in reducing the compensation of his employees for the
unworked Sundays, holidays, or other rest days which are considered As used in the rule, the term 'regular holiday' shall exclusively refer to:
paid-off days or holidays by agreement or practice subsisting upon the New Year's Day, Maundy Thursday, Good Friday, the ninth of April,
effectivity of the Code. the first of May, the twelfth of June, the last Sunday of August, the
thirtieth of November, the twenty-fifth and thirtieth of December.
SECTION 9. Relation to agreements. Nothing herein shall prevent Nationwide special days shall include the first of November and the
the employer and his employees or their representatives in entering last day of December.
into any agreement with terms more favorable to the employees than
those provided herein, or be used to diminish any benefit granted to the As used in this Rule legal or regular holiday and special holiday shall
employees under existing laws, agreements, and voluntary employer now be referred to as 'regular holiday' and 'special day', respectively.
practices.
SECTION 4. Compensation for holiday work. Any employee who
RULE IV is permitted or suffered to work on any regular holiday, not exceeding
Holidays with Pay eight (8) hours, shall be paid at least two hundred percent (200%) of
his regular daily wage. If the holiday work falls on the scheduled rest
SECTION 1. Coverage. This rule shall apply to all employees day of the employee, he shall be entitled to an additional premium pay
except:
of at least 30% of his regular holiday rate of 200% based on his regular (b) The regular holiday during the cessation of operation of an
wage rate. enterprise due to business reverses as authorized by the Secretary of
Labor and Employment may not be paid by the employer.
SECTION 5. Overtime pay for holiday work. For work performed
in excess of eight hours on a regular holiday, an employee shall be SECTION 8. Holiday pay of certain employees. (a) Private school
paid an additional compensation for the overtime work equivalent to teachers, including faculty members of colleges and universities, may
his rate for the first eight hours on such holiday work plus at least 30% not be paid for the regular holidays during semestral vacations. They
thereof. shall, however, be paid for the regular holidays during Christmas
vacation;
Where the regular holiday work exceeding eight hours falls on the (b) Where a covered employee, is paid by results or output, such as
scheduled rest day of the employee, he shall be paid an additional payment on piece work, his holiday pay shall not be less than his
compensation for the overtime work equivalent to his regular holiday- average daily earnings for the last seven (7) actual working days
rest day for the first 8 hours plus 30% thereof. The regular holiday rest preceding the regular holiday; Provided, However, that in no case shall
day rate of an employee shall consist of 200% of his regular daily the holiday pay be less than the applicable statutory minimum wage
wage rate plus 30% thereof. rate.
(c) Seasonal workers may not be paid the required holiday pay during
SECTION 6. Absences. (a) All covered employees shall be entitled off-season when they are not at work.
to the benefit provided herein when they are on leave of absence with (d) Workers who have no regular working days shall be entitled to the
pay. Employees who are on leave of absence without pay on the day benefits provided in this Rule.
immediately preceding a regular holiday may not be paid the required
holiday pay if he has not worked on such regular holiday. SECTION 9. Regular holiday falling on rest days or Sundays. (a) A
(b) Employees shall grant the same percentage of the holiday pay as regular holiday falling on the employee's rest day shall be
the benefit granted by competent authority in the form of employee's compensated accordingly.
compensation or social security payment, whichever is higher, if they (b) Where a regular holiday falls on a Sunday, the following day shall
are not reporting for work while on such benefits. be considered a special holiday for purposes of the Labor Code, unless
(c) Where the day immediately preceding the holiday is a non-working said day is also a regular holiday.
day in the establishment or the scheduled rest day of the employee, he
shall not be deemed to be on leave of absence on that day, in which SECTION 10. Successive regular holidays. Where there are two (2)
case he shall be entitled to the holiday pay if he worked on the day successive regular holidays, like Holy Thursday and Good Friday, an
immediately preceding the non-working day or rest day. employee may not be paid for both holidays if he absents himself from
work on the day immediately preceding the first holiday, unless he
SECTION 7. Temporary or periodic shutdown and temporary works on the first holiday, in which case he is entitled to his holiday
cessation of work. (a) In cases of temporary or periodic shutdown pay on the second holiday.
and temporary cessation of work of an establishment, as when a yearly
inventory or when the repair or cleaning of machineries and equipment SECTION 11. Relation to agreements. Nothing in this Rule shall
is undertaken, the regular holidays falling within the period shall be justify an employer in withdrawing or reducing any benefits,
compensated in accordance with this Rule. supplements or payments for unworked holidays as provided in
existing individual or collective agreement or employer practice or
policy.
LEAVES: SECTION 2. Right to service incentive leave. Every employee who
has rendered at least one year of service shall be entitled to a yearly
SIL service incentive leave of five days with pay.

Art. 95. Right to service incentive leave. SECTION 3. Definition of certain terms. The term "at least one-
1. Every employee who has rendered at least one year of service year service" shall mean service for not less than 12 months, whether
shall be entitled to a yearly service incentive leave of five days continuous or broken reckoned from the date the employee started
with pay. working, including authorized absences and paid regular holidays
unless the working days in the establishment as a matter of practice or
2. This provision shall not apply to those who are already policy, or that provided in the employment contract is less than 12
enjoying the benefit herein provided, those enjoying vacation months, in which case said period shall be considered as one year.
leave with pay of at least five days and those employed in
establishments regularly employing less than ten employees or SECTION 4. Accrual of benefit. Entitlement to the benefit provided
in establishments exempted from granting this benefit by the in this Rule shall start December 16, 1975, the date the amendatory
Secretary of Labor and Employment after considering the provision of the Code took effect.
viability or financial condition of such establishment.
SECTION 5. Treatment of benefit. The service incentive leave shall
3. The grant of benefit in excess of that provided herein shall not be commutable to its money equivalent if not used or exhausted at the
be made a subject of arbitration or any court or administrative end of the year.
action.
SECTION 6. Relation to agreements. Nothing in the Rule shall
RULE V justify an employer from withdrawing or reducing any benefits,
Service Incentive Leave supplements or payments as provided in existing individual or
SECTION 1. Coverage. This rule shall apply to all employees collective agreements or employer's practices or policies.
except:
(a) Those of the government and any of its political subdivisions, PATERNITY LEAVE ACT
including government-owned and controlled corporations;
(b) Domestic helpers and persons in the personal service of another; REPUBLIC ACT NO. 8187
(c) Managerial employees as defined in Book Three of this Code;
(d) Field personnel and other employees whose performance is AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7)
unsupervised by the employer including those who are engaged on DAYS WITH FULLPAY TO ALL MARRIED MALE
task or contract basis, purely commission basis, or those who are paid EMPLOYEES IN THE PRIVATE AND PUBLIC SECTORS FOR
a fixed amount for performing work irrespective of the time consumed THE FIRST FOUR (4) DELIVERIES OF THE
in the performance thereof; LEGITIMATESPOUSE WITH WHOM HE IS COHABITING
(e) Those who are already enjoying the benefit herein provided; AND FOR OTHER PURPOSES.
(f) Those enjoying vacation leave with pay of at least five days; and
(g) Those employed in establishments regularly employing less than Be it enacted by the Senate and House of Representatives of the
ten employees. Philippines in Congress assembled:
imprisonment shall be imposed on the entity's responsible officers,
SECTION 1. Short Title. - This Act shall be known as including, but not limited to, the president, vice-president, chief
the "Paternity Leave Act of 1996". executive officer, general manager, managing director or partner
directly responsible therefor.
SECTION 2. Notwithstanding any law, rules and regulations to the
contrary, every married male employee in the private and public SECTION 6. Nondiminution Clause. - Nothing in this Act shall be
sectors shall be entitled to a paternity leave of seven (7) days with full construed to reduce any existing benefits of any form granted under
pay for the first four (4) deliveries of the legitimate spouse with whom existing laws, decrees, executive orders, or any
he is cohabiting. The male employee applying for paternity leave shall contract agreement or policy between employer and employee.
notify his employer of the pregnancy of his legitimate spouse and
the expected date of such delivery. SECTION 7. Repealing Clause. - All laws, ordinances,
rules, regulations, issuances, or parts thereof which are
For purposes, of this Act, delivery shall include childbirth or any inconsistent with this Act are hereby repealed or modified
miscarriage. accordingly.

SECTION 3. Definition of Term. - For purposes of this SECTION 8. Effectivity. - This Act shall take effect (15) days from
Act, Paternity Leave refers to the benefits granted to a married male its publication in the Official Gazette or in at least two (2) newspapers
employee allowing him not to report for work for seven (7) of national circulation.
days but continues to earn the compensation therefor, on the condition
that his spouse has delivered a child or suffered a miscarriage for MATERNITY LEAVES:
purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the nursing of "SEC. 14A. Maternity Leave Benefit. A female member who has
the newly-born child. paid at least three (3) monthly contributions in the twelvemonth
period immediately preceding the semester of her childbirth or
SECTION 4. The Secretary of Labor and Employment, miscarriage shall be paid a daily maternity benefit equivalent to one
the Chairman of the Civil Service Commission and the Secretary of hundred percent (100%) of her average daily salary credit for sixty
Health shall, within thirty (30) days from the effectivity of (60) days or seventyeight (78) days in case of caesarean delivery,
this Act, issue such rules and regulations necessary for the proper subject to the following conditions:
implementation of the provisions hereof.
"(a) That the employee shall have notified her employer of her
SECTION 5. Any person, corporation, trust, firm, partnership, pregnancy and the probable date of her childbirth, which notice shall
association or entity found violating this Act or the rules be transmitted to the SSS in accordance with the rules and regulations
and regulations promulgated thereunder shall be punished by a it may provide;
fine not exceeding Twenty-five thousand pesos (P25,000) or
imprisonment of not less than thirty (30)days nor more than six (6) "(b) The full payment shall be advanced by the employer within thirty
months. (30) days from the filing of the maternity leave application;

If the violation is committed by a corporation, trust or firm,


partnership, association or any other entity, the penalty of
"(c) That payment of daily maternity benefits shall be a bar to the of the Interior and Local Government (DILG), the Commission on
recovery of sickness benefits provided by this Act for the same period Higher Education (CHED), the Technical Education and Skills
for which daily maternity benefits have been received; Development Authority (TESDA), the National Housing Authority
(NHA), the Department of Labor and Employment (DOLE) and other
"(d) That the maternity benefits provided under this section shall be related government and nongovernment agencies.
paid only for the first four (4) deliveries or miscarriages;
Section 3. Definition of Terms. - Whenever used in this Act, the
"(e) That the SSS shall immediately reimburse the employer of one following terms shall mean as follows:
hundred percent (100%) of the amount of maternity benefits advanced
to the employee by the employer upon receipt of satisfactory proof of (a) "Solo parent" - any individual who falls under any of the
such payment and legality thereof; and following categories:

"(f) That if an employee member should give birth or suffer (1) A woman who gives birth as a result of rape and
miscarriage without the required contributions having been remitted other crimes against chastity even without a final
for her by her employer to the SSS, or without the latter having been conviction of the offender: Provided, That the mother
previously notified by the employer of the time of the pregnancy, the keeps and raises the child;
employer shall pay to the SSS damages equivalent to the benefits
which said employee member would otherwise have been entitled to. (2) Parent left solo or alone with the responsibility of
parenthood due to death of spouse;
SOLO PARENTS
(3) Parent left solo or alone with the responsibility of
parenthood while the spouse is detained or is serving
AN ACT PROVIDING FOR BENEFITS AND PRIVILEGES TO sentence for a criminal conviction for at least one (1)
SOLO PARENTS AND THEIR CHILDREN, APPROPRIATING year;
FUNDS THEREFOR AND FOR OTHER PURPOSES
(4) Parent left solo or alone with the responsibility of
Be it enacted by the Senate and House of Representatives of the parenthood due to physical and/or mental incapacity of
Philippines Congress assembled: spouse as certified by a public medical practitioner;

Section 1. Title. - This Act shall be known as the "Solo Parents' (5) Parent left solo or alone with the responsibility of
Welfare Act of 2000." parenthood due to legal separation or de
facto separation from spouse for at least one (1) year, as
Section 2. Declaration of Policy. - It is the policy of the State to long as he/she is entrusted with the custody of the
promote the family as the foundation of the nation, strengthen its children;
solidarity and ensure its total development. Towards this end, it shall
develop a comprehensive program of services for solo parents and (6) Parent left solo or alone with the responsibility of
their children to be carried out by the Department of Social Welfare parenthood due to declaration of nullity or annulment of
and Development (DSWD), the Department of Health (DOH), the marriage as decreed by a court or by a church as long as
Department of Education, Culture and Sports (DECS), the Department he/she is entrusted with the custody of the children;
(7) Parent left solo or alone with the responsibility of without affecting the core work hours as defined by the
parenthood due to abandonment of spouse for at least employer.
one (1) year;
Section 4. Criteria for Support. - Any solo parent whose income in the
(8) Unmarried mother/father who has preferred to keep place of domicile falls below the poverty threshold as set by the
and rear her/his child/children instead of having others National Economic and Development Authority (NEDA) and subject
care for them or give them up to a welfare institution; to the assessment of the DSWD worker in the area shall be eligible for
assistance: Provided, however, That any solo parent whose income is
(9) Any other person who solely provides parental care above the poverty threshold shall enjoy the benefits mentioned in
and support to a child or children; Sections 6, 7 and 8 of this Act.

(10) Any family member who assumes the Section 5. Comprehensive Package of Social Development and
responsibility of head of family as a result of the death, Welfare Services. - A comprehensive package of social development
abandonment, disappearance or prolonged absence of and welfare services for solo parents and their families will be
the parents or solo parent. developed by the DSWD, DOH, DECS, CHED, TESDA, DOLE, NHA
and DILG, in coordination with local government units and a
A change in the status or circumstance of the parent nongovernmental organization with proven track record in providing
claiming benefits under this Act, such that he/she is no services for solo parents.
longer left alone with the responsibility of parenthood,
shall terminate his/her eligibility for these benefits. The DSWD shall coordinate with concerned agencies the
implementation of the comprehensive package of social development
(b) "Children" - refer to those living with and dependent upon and welfare services for solo parents and their families. The package
the solo parent for support who are unmarried, unemployed and will initially include:
not more than eighteen (18) years of age, or even over eighteen
(18) years but are incapable of self-support because of mental (a) Livelihood development services which include trainings on
and/or physical defect/disability. livelihood skills, basic business management, value orientation
and the provision of seed capital or job placement.
(c) "Parental responsibility" - with respect to their minor
children shall refer to the rights and duties of the parents as (b) Counseling services which include individual, peer group or
defined in Article 220 of Executive Order No. 209, as family counseling. This will focus on the resolution of personal
amended, otherwise known as the "Family Code of the relationship and role conflicts.
Philippines."
(c) Parent effectiveness services which include the provision
(d) "Parental leave" - shall mean leave benefits granted to a and expansion of knowledge and skills of the solo parent on
solo parent to enable him/her to perform parental duties and early childhood development, behavior management, health
responsibilities where physical presence is required. care, rights and duties of parents and children.

(e) "Flexible work schedule" - is the right granted to a solo


parent employee to vary his/her arrival and departure time
(d) Critical incidence stress debriefing which includes on said government low-cost housing projects in accordance with
preventive stress management strategy designed to assist solo housing law provisions prioritizing applicants below the poverty line
parents in coping with crisis situations and cases of abuse. as declared by the NEDA.

(e) Special projects for individuals in need of protection which Section 11. Medical Assistance. - The DOH shall develop a
include temporary shelter, counseling, legal assistance, medical comprehensive health care program for solo parents and their children.
care, self-concept or ego-building, crisis management and The program shall be implemented by the DOH through their retained
spiritual enrichment. hospitals and medical centers and the local government units (LGUs)
through their provincial/district/city/municipal hospitals and rural
Section 6. Flexible Work Schedule. - The employer shall provide for a health units (RHUs).
flexible working schedule for solo parents: Provided, That the same
shall not affect individual and company productivity: Provided, Section 12. Additional Powers and Functions of the DSWD. The
further, That any employer may request exemption from the above DSWD shall perform the following additional powers and functions
requirements from the DOLE on certain meritorious grounds. relative to the welfare of solo parents and their families:

Section 7. Work Discrimination. - No employer shall discriminate (a) Conduct research necessary to: (1) develop a new body of
against any solo parent employee with respect to terms and conditions knowledge on solo parents; (2) define executive and legislative
of employment on account of his/her status. measures needed to promote and protect the interest of solo
parents and their children; and (3) assess the effectiveness of
Section 8. Parental Leave. - In addition to leave privileges under programs designed for disadvantaged solo parents and their
existing laws, parental leave of not more than seven (7) working days children;
every year shall be granted to any solo parent employee who has
rendered service of at least one (1) year. (b) Coordinate the activities of various governmental and
nongovernmental organizations engaged in promoting and
Section 9. Educational Benefits. - The DECS, CHED and TESDA protecting the interests of solo parents and their children; and
shall provide the following benefits and privileges:
(c) Monitor the implementation of the provisions of this Act
(1) Scholarship programs for qualified solo parents and their and suggest mechanisms by which such provisions are
children in institutions of basic, tertiary and technical/skills effectively implemented.
education; and
Section 13. Implementing Rules and Regulations. - An interagency
(2) Nonformal education programs appropriate for solo parents committee headed by the DSWD, in coordination with the DOH,
and their children. DECS, CHED, TESDA, DOLE, NHA, and DILG is hereby established
which shall formulate, within ninety (90) days upon the effectivity of
The DECS, CHED and TESDA shall promulgate rules and regulations this Act, the implementing rules and regulations in consultation with
for the proper implementation of this program. the local government units, nongovernment organizations and people's
organizations.
Section 10. Housing Benefits. - Solo parents shall be given allocation
in housing projects and shall be provided with liberal terms of payment
Section 14. Appropriations. - The amount necessary to carry out the 3. This special leave shall be non-cumulative and non-convertible to
provisions of this Act shall be included in the budget of concerned cash.
government agencies in the General Appropriations Act of the year
following its enactment into law and thereafter.1awphil.net B. The CSC, in the case of the public sector including LGUs and other
State agencies, and the DOLE, in the case of the private sector, shall
Section 15. Repealing Clause. - All laws, decrees, executive orders, issue further guidelines and appropriate memorandum circulars within
administrative orders or parts thereof inconsistent with the provisions sixty (60) days from the adoption of these Rules and Regulations to
of this Act are hereby repealed, amended or modified accordingly. operationalize said policy, and monitor its implementation and act on
any violations thereof.
Section 16. Separability Clause. - If any provision of this Act is held
invalid or unconstitutional, other provisions not affected thereby shall VICTIMS OF VIOLENCE AGAINST WOMEN AND
continue to be in full force and effect. CHILDREN

Section 17. Effectivity Clause. - This Act shall take effect fifteen (15)
days following its complete publication in the Official Gazette or in at SECTION 43. Entitled to Leave. Victims under this Act shall be
least two (2) newspaper of general circulation. entitled to take a paid leave of absence up to ten (10) days in addition
to other paid leaves under the Labor Code and Civil Service Rules and
Regulations, extendible when the necessity arises as specified in the
SPECIAL LEAVE BENEFITS FOR WOMEN protection order.

Section 18. Special Leave Benefits for Women. - A woman employee Any employer who shall prejudice the right of the person under this
having rendered continuous aggregate employment service of at least section shall be penalized in accordance with the provisions of the
six (6) months for the last twelve (12) months shall be entitled to a Labor Code and Civil Service Rules and Regulations. Likewise, an
special leave benefit of two (2) months with full pay based on her employer who shall prejudice any person for assisting a co-employee
gross monthly compensation following surgery caused by who is a victim under this Act shall likewise be liable for
gynecological disorders. discrimination.

SECTION 21. Special Leave Benefits for Women Section 42. Ten-day paid leave in addition to other leave benefits. - At
any time during the application of any protection order, investigation,
A. Any female employee in the public and private sector regardless of prosecution and/or trial of the criminal case, a victim of VAWC who is
age and civil status shall be entitled to a special leave of two (2) employed shall be entitled to a paid leave of up to ten (10) days in
months with full pay based on her gross monthly compensation subject addition to other paid leaves under the Labor Code and Civil Service
to existing laws, rules and regulations due to surgery caused by Rules and Regulations and other existing laws and company policies,
gynecological disorders under such terms and conditions: extendible when the necessity arises as specified in the protection
order. The Punong Barangay/kagawad or prosecutor or the Clerk of
1. She has rendered at least six (6) months continuous aggregate Court, as the case may be, shall issue a certification at no cost to the
employment service for the last twelve (12) months prior to surgery; woman that such an action is pending, and this is all that is required for
2. In the event that an extended leave is necessary, the female the employer to comply with the 10-day paid leave. For government
employee may use her earned leave credits; and employees, in addition to the aforementioned certification, the
employee concerned must file an application for leave citing as basis
R.A. 9262. The administrative enforcement of this leave entitlement
shall be considered within the jurisdiction of the Regional Director of
the DOLE under Article 129 of the Labor Code of the Philippines, as
amended, for employees in the private sector, and the Civil Service
Commission, for government employees.

The availment of the ten day-leave shall be at the option of the woman
employee, which shall cover the days that she has to attend to medical
and legal concerns. Leaves not availed of are noncumulative and not
convertible to cash.

The employer/agency head who denies the application for leave, and
who shall prejudice the victim-survivor or any person for assisting a
co-employee who is a victim-survivor under the Act shall be held
liable for discrimination and violation of R.A 9262.

The provision of the Labor Code and the Civil Service Rules and
Regulations shall govern the penalty to be imposed on the said
employer/agency head.
Ninoy Aquino Day -Monday nearest
REPUBLIC ACT NO. 9492 August 21
All Saints Day -November 1
AN ACT RATIONALIZING THE CELEBRATION OF Last Day -December 31
NATIONAL HOLIDAYS AMENDING FOR THE PURPOSE of the
SECTION 26, CHAPTER 7, BOOK 1 OF EXECUTIVE ORDER Year
NO. 292, AS AMENDED, OTHERWISE KNOWN AS THE
ADMINISTRATIVE CODE OF 1987 c) In the event the holiday falls on a Wednesday, the holiday will
be observed on the Monday of that week. If the holiday falls on a
SECTION 1. Section 26, Chapter 7, Book 1 of Executive Order Sunday, the holiday will be observed on the Monday that follows:
No. 292, as amended, otherwise known as the Administrative Code of
1987, is hereby amended to read as follows: Provided, That for movable holidays, the President shall issue a
proclamation, at least six months prior to the holiday concerned, the
SEC. 26. Regular Holidays and Nationwide Special Days. specific date that shall be declared as a nonworking day:
(1) Unless otherwise modified by law, order or proclamation, the
following regular holidays and special days shall be observed in the Provided, however, That Eidul Adha shall be celebrated as a regional
country: holiday in the Autonomous Region in Muslim Mindanao.
a) Regular Holidays SECTION 2. All laws, orders presidential issuances, rules and
regulations or part thereof inconsistent with this Act are hereby repealed
New Years Day -January 1 or modified accordingly.
Maundy Thursday -Movable Date
Good Friday -Movable Date SECTION 3. This Act shall take effect after fifteen (15) days
Eidul Fitr -Movable Date following its publication in at least two newspapers of general
Araw ng Kagitingan (Bataan -Monday nearest April 9 circulation.
and Corregidor Day)

Labor Day -Monday nearest May 1


Independence Day -Monday nearest June 12

National Heroes Day -Last Monday of August


Bonifacio Day -Monday nearest November 30
Christmas Day -December 25
Rizal Day -Monday nearest December 30

b) Nationwide Special Holidays


REPUBLIC ACT NO. 9256 EXECUTIVE ORDER NO. 203 June 30, 1987

AN ACT DECLARING AUGUST 21 OF EVERY YEAR, AS PROVIDING A LIST OF REGULAR HOLIDAYS AND
NINOY AQUINO DAY, A SPECIAL NONWORKING SPECIAL DAYS TO BE OBSERVED THROUGHOUT THE
HOLIDAY, AND FOR OTHER PURPOSES PHILIPPINES AND FOR OTHER PURPOSES

SECTION 1. Ninoy Aquino Day. In order to commemorate the death WHEREAS, a Cabinet Assistance Secretariat Committee was
anniversary of former Senator Benigno Ninoy S. Aquino, Jr., August constituted to review all existing public holidays;
twenty-one of every year is hereby declared as the Ninoy Aquino day
which shall be a national nonworking holiday. WHEREAS, there are too many holidays being observed which has
caused confusion among the public.
SECTION 2. Edsa Commission. The EDSA Commission created
pursuant to Executive Order No. 82 (s. 1999) shall plan and implement NOW, THEREFORE, I, CORAZON C. AQUINO, President of the
appropriate ceremonies for the observance of the Ninoy Aquino Day. Philippines, do hereby order:

SECTION 3. Funding. The operations of the EDSA Commission Sec. 1. Unless otherwise modified by law, order or proclamation, the
shall be funded from the Budget of the Office of the President and from following regular holidays and special days shall be observed in this
private donations. Funds accruing to and expenses made by the EDSA country:
Commission shall be subject to the usual accounting rules and
procedures. A. Regular Holidays

SECTION 4. Repealing Clause. All laws, presidential decrees, New Year's Day January
orders, issuances, rules and regulations and any part thereof
Maundy Thursday Movable date
inconsistent, which are inconsistent with provisions of this Act are
hereby amended or modified accordingly. Good Friday Movable date
Araw ng Kagitingan (Bataan and April 9
SECTION 5. Separability Clause. If any provision of this Act is held
Corregidor Day)
unconstitutional or invalid, all other provisions not affected thereby
shall remain valid. Labor Day May 1
Independence Day June 12
SECTION 6. Effectivity. This Act shall take effect fifteen (15) days
after its publication in at least two (2) newspapers of general circulation. National Heroes Day Last Sunday of
August
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30
B. Nationwide Special Days WHEREAS, in order to foster closer family ties during All Saints Day,
as well as to enable our countrymen to observe Christmas more
All Saints Day November 1 meaningfully, declaring November 2 (Monday) and December 24
Last Day of the Year December 31 (Thursday) as additional special (non-working) day throughout the
country will strengthen the family relationship by providing longer
weekends and renew ties for a longer period of time, as well as to
Sec. 2. Henceforth, the terms "legal or regular holiday" and "special promote domestic tourism.
holiday", as used in laws, orders, rules and regulations or other
issuances shall now be referred to as "regular holiday" and "special
NOW, THEREFORE, I, GLORIA MACAPAGAL-
day", respectively. ARROYO, President of the Republic of the Philippines, by virtue of the
powers vested in me by law, do hereby order:
Sec. 3. All laws, orders, issuances, rules and regulations or parts
thereof inconsistent with this Executive Order are hereby repealed or SECTION 1. The following regular holidays and special days for the
modified accordingly. year 2009 shall be observed in the country:
Sec. 4. This Executive Order shall take effect immediately.
A. Regular Holidays
Done in the City of Manila, this 30th day of June, in the year of Our Maundy Thursday April 9
Lord, nineteen hundred and eighty-seven. Good Friday April 10
Araw ng Kagitingan April 6 (Monday), Monday nearest
PROCLAMATION NO. 1699 April 9
Labor Day May 1 (Friday)
DECLARING THE REGULAR HOLIDAYS AND THE Independence Day June 12 (Friday)
SPECIAL (NON-WORKING) DAYS FOR THE YEAR 2009 National Heroes Day August 31 (Monday), Last
Monday of August
WHEREAS, Republic Act (RA) No. 9492, dated July 24, 2007, Bonifacio Day November 30 (Monday)
amended Section 26, Chapter 7, Book 1 of Executive Order (EO) No. Christmas Day December 25 (Friday)
292, also known as the Administrative Code of 1987, by declaring
Rizal Day December 30 (Wednesday)
certain days (specific or movable) as special or regular holidays;
B. Special (Non-Working) Days
WHEREAS, RA No. 9492 provides that holidays, except those which Ninoy Aquino Day August 21 (Friday)
are religious in nature, are moved to the nearest Monday unless All Saints Day November 1 (Sunday)
otherwise modified by law, order or proclamation; Additional special (non-working) November 2 (Monday)
day
WHEREAS, May 1 (Labor Day) has been celebrated on its exact day Additional special (non-working) December 24 (Thursday)
as a long cherished tradition of workers who fought very hard to day
institutionalize such a holiday in the country, as well as an international Last Day of the Year December 31 (Thursday)
event celebrated on such exact date;
SECTION 2. The proclamation declaring a national holiday for the case he shall be entitled to the holiday pay if he worked on the day
observance of Eidl Fitr shall hereafter be issued after the approximate immediately preceding the non-working day or rest day.
date of the Islamic holiday has been determined in accordance with the
Islamic calendar (Hijra) or the lunar calendar, or upon Islamic
astronomical calculations, whichever is possible or convenient. To this 1.5. FORMULA FOR COMPUTING WAGES
end, the Office on Muslim Affairs shall inform the Office of the
President on which day the holiday shall fall. print 2.

SECTION 3. The Department of Labor and Employment (DOLE) shall 1.6 13TH MONTH PAY LAW
promulgate the implementing guidelines for this Proclamation.

SECTION 4. This Proclamation shall take effect immediately. PRESIDENTIAL DECREE No. 851 December 16, 1976

SECTION 5. This Proclamation shall be published in a newspaper of REQUIRING ALL EMPLOYERS TO PAY THEIR
general circulation. EMPLOYEES A 13th-MONTH PAY

IN WITNESS WHEREOF, I have hereunto set my hand and caused WHEREAS, it is necessary to further protect the level of real wages
the seal of the Republic of the Philippines to be affixed. from the ravage of worldwide inflation;

DONE in the City of Manila, this 24th day of December in the year of WHEREAS, there has been no increase in the legal minimum wage
Our Lord, Two Thousand and Eight. rates since 1970;

OMNIBUS RULES IMPLEMENTING LB3, R4, S6 WHEREAS, the Christmas season is an opportune time for society to
RULE IV show its concern for the plight of the working masses so they may
Holidays with Pay properly celebrate Christmas and New Year.

SECTION 6. Absences. (a) All covered employees shall be NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the
entitled to the benefit provided herein when they are on leave of powers vested in me by the Constitution, do hereby decree as follows:
absence with pay. Employees who are on leave of absence without pay
on the day immediately preceding a regular holiday may not be paid Section 1. All employers are hereby required to pay all their
the required holiday pay if he has not worked on such regular holiday. employees receiving a basic salary of not more than P1,000 a month,
(b) Employees shall grant the same percentage of the holiday pay as regardless of the nature of their employment, a 13th-month pay not
the benefit granted by competent authority in the form of employee's later than December 24 of every year.
compensation or social security payment, whichever is higher, if they
are not reporting for work while on such benefits. Section 2. Employers already paying their employees a 13th-month
(c) Where the day immediately preceding the holiday is a non-working pay or its equivalent are not covered by this Decree.
day in the establishment or the scheduled rest day of the employee, he
shall not be deemed to be on leave of absence on that day, in which Section 3. This Decree shall take effect immediately.
MEMORANDUM ORDER NO. 28 corporations operating essentially as private subsidiaries of the
Government;
MODIFYING PRESIDENTIAL DECREE NO. 851 REQUIRING ALL b. Employers already paying their employees a 13th month pay or
EMPLOYERS TO PAY THEIR EMPLOYEES A 13TH MONTH PAY more in a calendar year or its equivalent at the time of this issuance;
c. Employers of household helpers and persons in the personal service
Section 1 of Presidential Decree No. 851 is hereby modified to the of another in relation to such workers; and
extent that all employees are hereby required to pay all their rank-and- d. Employers of those who are paid on purely commission, boundary,
file employees a 13th month pay not later than December 24 of every or task basis, and those who are paid a fixed amount for performing
year. specific work, irrespective of the time consumed in the performance
thereof, except where the workers are paid on piece-rate basis in which
case the employer shall grant the required 13th month pay to such
REVISED GUIDELINES workers.
ON THE IMPLEMENTATION OF THE 13TH MONTH PAY As used herein, workers paid on piece-rate basis shall refer to those
LAW. who are paid a standard amount for every piece or unit of work
produced that is more or less regularly replicated, without regard to the
1. Removal of Salary Ceiling. time spent in producing the same.
On August 13, 1986, President Corazon C. Aquino issued The term "its equivalent" as used on paragraph (b) hereof shall include
Memorandum Order No. 28 which provides as follows: Christmas bonus, mid-year bonus, cash bonuses and other payments
"Section 1 of Presidential Decree No. 851 is hereby modified to the amounting to not less than 1/12 of the basic salary but shall not include
extent that all employers are hereby required to pay all their rank-and- cash and stock dividends, cost of living allowances and all other
file employees a 13th month pay not later than December 24 of every allowances regularly enjoyed by the employee, as well as non-
year." monetary benefits. Where an employer pays less than required 1/12th
of the employees basic salary, the employer shall pay the difference.
Before its modification by the aforecited Memorandum Order, P.D.
No. 851 excludes from entitlement to the 13th month pay those 3. Who are Rank-and File Employees.
employees who were receiving a basic salary of more than P1,000.00 a The Labor Code distinguishes a rank-and-file employee from a
month. With the removal of the salary ceiling of P1,000.00, all rank managerial employee. It provides that a managerial employee is one
and file employees are now entitled to a 13th month pay regardless of who is vested with powers of prerogatives to lay down and execute
the amount of basic salary that they receive in a month if their management policies and/or to hire, transfer, suspend, lay-off, recall
employers are not otherwise exempted from the application of P.D. discharge, assign or discipline employees, or to effectively recommend
No. 851. Such employees are entitled to the benefit regardless of their such managerial actions. All employees not falling within this
designation or employment status, and irrespective of the method by definition are considered rank-and-file employees.
which their wages are paid, provided that they have worked for at least The above distinction shall be used as guide for the purpose of
one (1) month during a calendar year. determining who are rank-and-file employees entitled to the mandated
13th month pay.
2. Exempted Employers.
The following employers are still not covered by P.D. No. 851: 4. Amount and payment of 13th Month Pay
a. The Government and any of its political subdivisions, including (a) Minimum of the Amount. The minimum 13th month pay
government-owned and controlled corporations, excepts those required by law shall not be less than one-twelfth of the total basic
salary earned by an employee within a calendar year. For the year employer and the recognized/collective bargaining agent of the
1987, the computation of the 13th month pay shall include the cost of employees.
living allowances (COLA) integrated into the basic salary of a covered
employee pursuant to Executive Order 178. 5. 13th Month Pay for Certain Types of Employees.
(a) Employees Paid by Results. Employees who are paid on piece
E.O. No. 178 provides, among other things, that the P9.00 of the daily work basis are by law entitled to the 13th month pay.
COLA of P17.00 for non-agricultural workers shall be integrated into Employees who are paid a fixed or guaranteed wage plus commission
the basic pay of covered employees effective 1 May 1987, and the are also entitled to the mandated 13th month pay, based on their total
remaining P8.00 effective 1 October 1987. For establishments with earnings during the calendar year, i.e., on both their fixed or
less than 30 employees and paid-up capital of P500,000 or less, the guaranteed wage and commission.
integration of COLAs shall be as follows: P4.50 effective on 1 May
1987; P4.50 on 1 October 1987; and P8.00 effective 1 January 1988. (b) Those with Multiple Employers. Government employees
Thus, in the computation of the 13th month pay for 1987, the COLAs working part time in a private enterprise, including private educational
integrated into the basic pay shall be included as of the date of their institutions, as well as employees working in two or more private
integration. firms, whether on full or part time basis, are entitled to the required
13th month pay from all their private employers regardless of their
Where the total P17.00 daily COLA was integrated effective 1 May total earnings from each or all their employers.
1987 or earlier the inclusion of said COLA as part of the of the basic
pay for the purpose of computing the 13th month pay shall be (c) Private School Teachers. Private school teachers, including
reckoned from the date of actual integration. faculty members of universities and colleges, are entitled to the
required 13th month pay, regardless of the number of months they
The "basic salary" of an employee for the purpose of computing the teach or are paid within a year, if they have rendered service for at
13th month pay shall include all remunerations or earning paid by this least one (1) month within a year.
employer for services rendered but does not include allowances and
monetary benefits which are not considered or integrated as part of the 6. 13th Month Pay of Resigned or Separated Employee.
regular or basic salary, such as the cash equivalent of unused vacation An employee who has resigned or whose services were terminated at
and sick leave credits, overtime, premium, night differential and any time before the time for payment of the 13th month pay is entitled
holiday pay, and cost-of-living allowances. However, these salary- to this monetary benefit in proportion to the length of time he worked
related benefits should be included as part of the basic salary in the during the year, reckoned from the time he started working during the
computation of the 13th month pay if by individual or collective calendar year up to the time of his resignation or termination from the
agreement, company practice or policy, the same are treated as part of service. Thus, if he worked only from January up to September his
the basic salary of the employees. proportionate 13th month pay should be equivalent of 1/12 his total
basic salary he earned during that period.
(b) Time of Payment. The required 13th month pay shall be paid
not later than December 24 of each year. An employer, however, may The payment of the 13th month pay may be demanded by the
give to his employees one half () of the required 13th month pay employee upon the cessation of employer-employee relationship. This
before the opening of the regular school year and the other half on is consistent with the principle of equity that as the employer can
before the 24th of December of every year. The frequency of payment require the employee to clear himself of all liabilities and property
of this monetary benefit may be the subject of agreement between the
accountability, so can the employee demand the payment of all
benefits due him upon the termination of the relationship.

7. Non-inclusion in Regular Wage.


The mandated 13th month pay need not be credited as part of regular
wage of employees for purposes of determining overtime and premium
pays, fringe benefits insurance fund, Social Security, Medicare and
private retirement plans.

8. Prohibitions against reduction or elimination of benefits.


Nothing herein shall be construed to authorize any employer to
eliminate, or diminish in any way, supplements, or other employee
benefits or favorable practice being enjoyed by the employee at the
time of promulgation of this issuance.
BASIC INCOME TAX ON INDIVIDUAL CITIZENS: night shift differential pay and hazard pay received by such minimum
wage earners shall likewise be exempt from income tax.
SEC. 2. Section 24(A) of Republic Act No. 8424, as amended, "x x x."
otherwise known as the National Internal Revenue Code of 1997, is
hereby further amended to read as follows:
"SEC. 24. Income Tax Rates. - TAX ON INDIVIDUALS
"(A) Rates of Income Tax on Individual Citizen and Individual
Resident Alien of the Philippines. - SEC. 24. Income Tax Rates. -
"(1) x x x:
"x x x; and (A) Rates of Income Tax on Individual Citizen and Individual
"(c) On the taxable income defined in Section 31 of this code, other Resident Alien of the Philippines.-
than income subject to tax under Subsections (B), (C) and (D) of this
Section, derived for each taxable year from all sources within the (1) An income tax is hereby imposed:
Philippines by an individual alien who is a resident of the Philippines.
"(2) Rates of Tax on Taxable Income of Individuals. - The tax shall be
computed in accordance with and at the rates established in the
(a) On the taxable income defined in Section 31 of this Code, other
following schedule:
than income subject to tax under Subsections (B), (C) and (D) of this
"Not over P10,000 ........Section,
5% derived for each taxable year from all sources within and
"Over P10,000 but not over P30,000 ........without the Philippines
P500+10% be every
of the excess overindividual
P10,000 citizen of the Philippines
residing therein;
"Over P30,000 but not over P70,000 ........ P2,500+15% of the excess over P30,000
"Over P70,000 but not over P140,000 ........(b) On the taxableofincome
P8,500+20% defined
the excess over in Section 31 of this Code, other
P70,000
than income subject to tax under Subsections (B), (C) and (D) of this
"Over P140,000 but not over P250,000 ........Section, derived forofeach
P22,500+25% taxable
the excess overyear from all sources within the
P140,000
Philippines by an individual citizen of the Philippines who is residing
"Over P250,000 but not over P500,000 ........ P50,000+30% of the excess over P250,000
outside of the Philippines including overseas contract workers
"Over P5000,000 ........referred to in Subsection(C)
P125,000+32% of Section
of the excess over 23 hereof; and
P500,000
"For married individuals, the husband and wife, subject to the
(c) On the taxable income defined in Section 31 of this Code, other
provision of Section 51 (D) hereof, shall compute separately their
individual income tax based on their respective total taxable than income subject to tax under Subsections (B), (C) and (D) of this
income: Provided, that if any income cannot be definitely attributed to Section, derived for each taxable year from all sources within the
or identified as income exclusively earned or realized by either of the Philippines by an individual alien who is a resident of the Philippines.
spouses, the same shall be divided equally between the spouses for the
purpose of determining their respective taxable income. (2) Rates of Tax on Taxable Income of Individuals. [11] - The tax shall
"Provided, That minimum wage earners as defined in Section 22 (HH) be computed in accordance with and at the rates established in the
of this Code shall be exempt from the payment of income tax on their following schedule:
taxable income: Provided, further, That the holiday pay, overtime pay,
Not over P10,000
5%
winnings), derived from sources within the Philippines: Provided,
Over P10,000 but
P500+10% of the excess however, That interest income received by an individual taxpayer
not over P30,000
over P10,000 (except a nonresident individual) from a depository bank under the
Over P30,000 but
P2,500+15% of the
not over P70,000
excess over P30,000
expanded foreign currency deposit system shall be subject to a final
Over P70,000 but
P8,500+20% of the income tax at the rate of seven and one-half percent (7 1/2%) of such
not over
excess over P70,000 interest income: Provided, further, That interest income from long-
P140,000
P22,500+25% of the
Over P140,000
excess over P140,000
term deposit or investment in the form of savings, common or
but not over individual trust funds, deposit substitutes, investment management
P50,000+30% of the
P250,00
excess over P250,000 accounts and other investments evidenced by certificates in such
Over P250,000
P125,000+32% of the
but not over
excess over
form prescribed by the Bangko Sentral ng Pilipinas (BSP) shall be
P500,000
P500,000.[12] exempt from the tax imposed under this Subsection: Provided,
Over P500,000
finally, That should the holder of the certificate pre-terminate the
For married individuals, the husband and wife, subject to the provision of Section 51 (D) deposit or investment before the fifth (5th) year, a final tax shall be
hereof, shall compute separately their individual income tax based on their respective total imposed on the entire income and shall be deducted and withheld by
taxable income: Provided, That if any income cannot be definitely attributed to or identified the depository bank from the proceeds of the long-term deposit or
as income exclusively earned or realized by either of the spouses, the same shall be divided
equally between the spouses for the purpose of determining their respective taxable income. investment certificate based on the remaining maturity thereof:

Provided, That minimum wage earners as defined in Section 22(HH)


of this Code shall be exempt from the payment of income tax on their Four (4) years to less than five (5) years - 5%;
Three (3) years to less than (4) years - 12%; and
taxable income: provided, further, That the holiday pay, overtime pay,
Less than three (3) years - 20%
night shift differential pay and hazard pay received by such minimum
wage earners shall likewise be exempt from income tax. [13]
(2) Cash and/or Property Dividends. - A final tax at the following rates
shall be imposed upon the cash and/or property dividends actually or
(B) Rate of Tax on Certain Passive Income: -
constructively received by an individual from a domestic corporation
or from a joint stock company, insurance or mutual fund companies
(1) Interests, Royalties, Prizes, and Other Winnings. -
and regional operating headquarters of multinational companies, or
A final tax at the rate of twenty percent (20%) is hereby imposed on the share of an individual in the distributable net income after tax
upon the amount of interest from any currency bank deposit and of a partnership (except a general professional partnership) of which
yield or any other monetary benefit from deposit substitutes and he is a partner, or on the share of an individual in the net income after
from trust funds and similar arrangements; royalties, except on tax of an association, a joint account, or a joint venture or consortium
books, as well as other literary works and musical compositions, taxable as a corporation of which he is a member or co-venturer:
which shall be imposed a final tax of ten percent (10%); prizes (except
Six percent (6%) beginning January 1, 1998;
prizes amounting to Ten thousand pesos (P10,000) or less which shall
Eight percent (8%) beginning January 1, 1999;
be subject to tax under Subsection (A) of Section 24; and other
Ten percent (10%) beginning January 1, 2000.
winnings (except Philippine Charity Sweepstakes and Lotto
Provided, however, That the tax on dividends shall apply only on months from the date of sale or disposition, shall be exempt from the
income earned on or after January 1, 1998. Income forming part of capital gains tax imposed under this Subsection: Provided, That the
retained earnings as of December 31, 1997 shall not, even if declared historical cost or adjusted basis of the real property sold or disposed
or distributed on or after January 1, 1998, be subject to this tax. shall be carried over to the new principal residence built or acquired:
Provided, further, That the Commissioner shall have been duly
(C) Capital Gains from Sale of Shares of Stock not Traded in the notified by the taxpayer within thirty (30) days from the date of sale or
Stock Exchange. - The provisions of Section 39(B) notwithstanding, a disposition through a prescribed return of his intention to avail of the
final tax at the rates prescribed below is hereby imposed upon the net tax exemption herein mentioned: Provided, still further, That the said
capital gains realized during the taxable year from the sale, barter, tax exemption can only be availed of once every ten (10) years:
exchange or other disposition of shares of stock in a domestic Provided, finally, That if there is no full utilization of the proceeds of
corporation, except shares sold, or disposed of through the stock sale or disposition, the portion of the gain presumed to have been
exchange. realized from the sale or disposition shall be subject to capital gains
tax. For this purpose, the gross selling price or fair market value at the
Not over P 100,000 5% time of sale, whichever is higher, shall be multiplied by a fraction which
On any amount in excess of P 100,000 10%
the unutilized amount bears to the gross selling price in order to
determine the taxable portion and the tax prescribed under paragraph
(D) Capital Gains from Sale of Real Property. - (1) of this Subsection shall be imposed thereon.

(1) In General. - The provisions of Section 39(B) notwithstanding, a


final tax of six percent (6%) based on the gross selling price or current
fair market value as determined in accordance with Section 6(E) of this
Code, whichever is higher, is hereby imposed upon capital gains
presumed to have been realized from the sale, exchange, or other COMPUTATION OF GROSS INCOME
disposition of real property located in the Philippines, classified as
capital assets, including pacto de retro sales and other forms of SEC. 32. Gross Income. -
conditional sales, by individuals, including estates and trusts:
Provided, That the tax liability, if any, on gains from sales or other (A) General Definition. - Except when otherwise provided in this Title,
dispositions of real property to the government or any of its political gross income means all income derived from whatever source,
subdivisions or agencies or to government-owned or controlled including (but not limited to) the following items:
corporations shall be determined either under Section 24 (A) or under
this Subsection, at the option of the taxpayer; (1) Compensation for services in whatever form paid, including, but
not limited to fees, salaries, wages, commissions, and similar items;
(2) Exception. - The provisions of paragraph (1) of this Subsection to (2) Gross income derived from the conduct of trade or business or the
the contrary notwithstanding, capital gains presumed to have been exercise of a profession;
realized from the sale or disposition of their principal residence by (3) Gains derived from dealings in property;
natural persons, the proceeds of which is fully utilized in acquiring or (4) Interests;
constructing a new principal residence within eighteen (18) calendar (5) Rents;
(6) Royalties; (5) Income Exempt under Treaty. - Income of any kind, to the extent
(7) Dividends; required by any treaty obligation binding upon the Government of the
(8) Annuities; Philippines.
(9) Prizes and winnings;
(10) Pensions; and (6) Retirement Benefits, Pensions, Gratuities, etc.-
(11) Partner's distributive share from the net income of the general
professional partnership. (a) Retirement benefits received under Republic Act No. 7641 and
those received by officials and employees of private firms, whether
(B) Exclusions from Gross Income. - The following items shall not be individual or corporate, in accordance with a reasonable private
included in gross income and shall be exempt from taxation under this benefit plan maintained by the employer: Provided, That the retiring
Title: official or employee has been in the service of the same employer for
at least ten (10) years and is not less than fifty (50) years of age at the
(1) Life Insurance. - The proceeds of life insurance policies paid to the time of his retirement: Provided, further, That the benefits granted
heirs or beneficiaries upon the death of the insured, whether in a single under this subparagraph shall be availed of by an official or employee
sum or otherwise, but if such amounts are held by the insurer under an only once. For purposes of this Subsection, the term 'reasonable
agreement to pay interest thereon, the interest payments shall be private benefit plan' means a pension, gratuity, stock bonus or profit-
included in gross income. sharing plan maintained by an employer for the benefit of some or all
of his officials or employees, wherein contributions are made by such
(2) Amount Received by Insured as Return of Premium. - The employer for the officials or employees, or both, for the purpose of
amount received by the insured, as a return of premiums paid by him distributing to such officials and employees the earnings and principal
under life insurance, endowment, or annuity contracts, either during of the fund thus accumulated, and wherein its is provided in said plan
the term or at the maturity of the term mentioned in the contract or that at no time shall any part of the corpus or income of the fund be
upon surrender of the contract. used for, or be diverted to, any purpose other than for the exclusive
benefit of the said officials and employees.
(3) Gifts, Bequests, and Devises. - The value of property acquired by
gift, bequest, devise, or descent: Provided, however, That income (b) Any amount received by an official or employee or by his heirs from
from such property, as well as gift, bequest, devise or descent of the employer as a consequence of separation of such official or
income from any property, in cases of transfers of divided interest, employee from the service of the employer because of death sickness
shall be included in gross income. or other physical disability or for any cause beyond the control of the
said official or employee.
(4) Compensation for Injuries or Sickness. - amounts received,
through Accident or Health Insurance or under Workmen's (c) The provisions of any existing law to the contrary notwithstanding,
Compensation Acts, as compensation for personal injuries or sickness, social security benefits, retirement gratuities, pensions and other
plus the amounts of any damages received, whether by suit or similar benefits received by resident or nonresident citizens of the
agreement, on account of such injuries or sickness. Philippines or aliens who come to reside permanently in the
Philippines from foreign government agencies and other institutions,
private or public.
(d) Payments of benefits due or to become due to any person residing tournaments whether held in the Philippines or abroad and sanctioned
in the Philippines under the laws of the United States administered by by their national sports associations.
the United States Veterans Administration.
(e) 13th Month Pay and Other Benefits. - Gross benefits received by
(e) Benefits received from or enjoyed under the Social Security System officials and employees of public and private entities: Provided,
in accordance with the provisions of Republic Act No. 8282. however, That the total exclusion under this subparagraph shall not
exceed eighty-two thousand pesos (P82,000) which shall cover:
(f) Benefits received from the GSIS under Republic Act No. 8291,
including retirement gratuity received by government officials and (i) Benefits received by officials and employees of the national and
employees. local government pursuant to Republic Act No. 6686;
(ii) Benefits received by employees pursuant to Presidential Decree
(7) Miscellaneous Items. - No. 851, as amended by Memorandum Order No. 28, dated August 13,
1986;
(a) Income Derived by Foreign Government. - Income derived from (iii) Benefits received by officials and employees not covered by
investments in the Philippines in loans, stocks, bonds or other Presidential decree No. 851, as amended by Memorandum Order No.
domestic securities, or from interest on deposits in banks in the 28, dated August 13, 1986; and
Philippines by (i) foreign governments, (ii) financing institutions (iv) Other benefits such as productivity incentives and Christmas
owned, controlled, or enjoying refinancing from foreign governments, bonus: Provided, That every three (3) years after the effectivity of this
and (iii) international or regional financial institutions established by Act, the President of the Philippines shall adjust the amount herein
foreign governments. stated to its present value using the Consumer Price Index (CPI), as
published by the National Statistics Office.
(b) Income Derived by the Government or its Political
Subdivisions. - Income derived from any public utility or from the (f) GSIS, SSS, Medicare and Other Contributions. - GSIS, SSS,
exercise of any essential governmental function accruing to the Medicare and Pag-Ibig contributions, and union dues of individuals.
Government of the Philippines or to any political subdivision thereof.
(g) Gains from the Sale of Bonds, Debentures or other Certificate of
(c) Prizes and Awards. - Prizes and awards made primarily in Indebtedness. - Gains realized from the same or exchange or
recognition of religious, charitable, scientific, educational, artistic, retirement of bonds, debentures or other certificate of indebtedness
literary, or civic achievement but only if: with a maturity of more than five (5) years.

(i) The recipient was selected without any action on his part to enter (h) Gains from Redemption of Shares in Mutual Fund. - Gains
the contest or proceeding; and realized by the investor upon redemption of shares of stock in a
(ii) The recipient is not required to render substantial future services as mutual fund company as defined in Section 22 (BB) of this Code.
a condition to receiving the prize or award.

(d) Prizes and Awards in sports Competition. - All prizes and awards FRINGE BENEFIT TAXES:
granted to athletes in local and international sports competitions and
SEC. 33. Special Treatment of Fringe Benefit. - (6) Membership fees, dues and other expenses borne by the employer
for the employee in social and athletic clubs or other similar
(A) Imposition of Tax. - A final tax of thirty-four percent (34%) organizations;
effective January 1, 1998; thirty-three percent (33%) effective January (7) Expenses for foreign travel;
1, 1999; and thirty-two percent (32%) effective January 1, 2000 and (8) Holiday and vacation expenses;
thereafter, is hereby imposed on the grossed-up monetary value of (9) Educational assistance to the employee or his dependents; and
fringe benefit furnished or granted to the employee (except rank and (10) Life or health insurance and other non-life insurance premiums or
file employees as defined herein) by the employer, whether an similar amounts in excess of what the law allows.
individual or a corporation (unless the fringe benefit is required by the
nature of, or necessary to the trade, business or profession of the (C) Fringe Benefits Not Taxable. - The following fringe benefits are
employer, or when the fringe benefit is for the convenience or not taxable under this Section:
advantage of the employer). The tax herein imposed is payable by the (1) Fringe benefits which are authorized and exempted from tax under
employer which tax shall be paid in the same manner as provided for special laws;
under Section 57 (A) of this Code. The grossed-up monetary value of (2) Contributions of the employer for the benefit of the employee to
the fringe benefit shall be determined by dividing the actual monetary retirement, insurance and hospitalization benefit plans;
value of the fringe benefit by sixty-six percent (66%) effective January (3) Benefits given to the rank and file employees, whether granted
1, 1998; sixty-seven percent (67%) effective January 1, 1999; and under a collective bargaining agreement or not; and
sixty-eight percent (68%) effective January 1, 2000 and thereafter: (4) De minimis benefits as defined in the rules and regulations to be
Provided, however, That fringe benefit furnished to employees and promulgated by the Secretary of Finance, upon recommendation of the
taxable under Subsections (B), (C), (D) and (E) of Section 25 shall be Commissioner.
taxed at the applicable rates imposed thereat: Provided, further, That The Secretary of Finance is hereby authorized to promulgate, upon
the grossed -up monetary value of the fringe benefit shall be recommendation of the Commissioner, such rules and regulations as
determined by dividing the actual monetary value of the fringe benefit are necessary to carry out efficiently and fairly the provisions of this
by the difference between one hundred percent (100%) and the Section, taking into account the peculiar nature and special need of the
applicable rates of income tax under Subsections (B), (C), (D), and (E) trade, business or profession of the employer.
of Section 25.

(B) Fringe Benefit Defined. - For purposes of this Section, the term TAX ON INCOME
'fringe benefit' means any good, service or other benefit furnished or
granted in cash or in kind by an employer to an individual employee SEC. 22. Definitions. - When used in this Title
(except rank and file employees as defined herein) such as, but not
limited to, the following: (AA) The term 'rank and file employees' shall mean all employees
(1) Housing; who are holding neither managerial nor supervisory position as
(2) Expense account; defined under existing provisions of the Labor Code of the Philippines,
(3) Vehicle of any kind; as amended.
(4) Household personnel, such as maid, driver and others;
(5) Interest on loan at less than market rate to the extent of the
(CC) The term 'trade, business or profession' shall not include
difference between the market rate and actual rate granted;
performance of services by the taxpayer as an employee.
The grossed-up monetary value of the fringe benefit represents the
REVENUE REGULATIONS NO. 03-98 whole amount of income realized by the employee which includes the
SUBJECT : Implementing Section 33 of the National net amount of money or net monetary value of property which has
Internal Revenue Code, as Amended by Republic Act No. 8424 been received plus the amount of fringe benefit tax thereon otherwise
Relative to the Special Treatment of Fringe Benefits due from the employee but paid by the employer for and in behalf of
TO : All Internal Revenue Officers and Others Concerned his employee, pursuant to the provisions of this Section.
Pursuant to Section 244, in relation to Section 33 of the National Coverage These Regulations shall cover only those fringe benefits
Internal Revenue Code of 1997, these Regulations are hereby given or furnished to managerial or supervisory employees and not to
promulgated to govern the collection at source of the tax on fringe the rank and file.
benefits which have been furnished, granted or paid by the employer The term, "RANK AND FILE EMPLOYEES" means all employees
beginning January 1, 1998. who are holding neither managerial nor supervisory position. The
Labor Code of the Philippines, as amended, defines "managerial
SEC. 2.33. SPECIAL TREATMENT OF FRINGE BENEFITS employee" as one who is vested with powers or prerogatives to lay
(A) Imposition of Fringe Benefits Tax A final withholding tax down and execute management policies and/or to hire, transfer,
is hereby imposed on the grossed-up monetary value of fringe benefit suspend, lay-off, recall, discharge, assign or discipline employees.
furnished, granted or paid by the employer to the employee, except "Supervisory employees" are those who, in the interest of the
rank and file employees as defined in these Regulations, whether such employer, effectively recommend such managerial actions if the
employer is an individual, professional partnership or a corporation, exercise of such authority is not merely routinary or clerical in nature
regardless of whether the corporation is taxable or not, or the but requires the use of independent judgment. cdtai
government and its instrumentalities except when: (1) the fringe Moreover, these regulations do not cover those benefits properly
benefit is required by the nature of or necessary to the trade, business forming part of compensation income subject to withholding tax on
or profession of the employer; or (2) when the fringe benefit is for the compensation in accordance with Revenue Regulations No. 2-98.
convenience or advantage of the employer. The fringe benefit tax shall Fringe benefits which have been paid prior to January 1, 1998 shall not
be imposed at the following rates: be covered by these Regulations.
Effective January 1, 1998 - 34% Determination of the Amount Subject to the Fringe Benefit Tax In
Effective January 1, 1999 - 33% general, the computation of the fringe benefits tax would entail (a)
Effective January 1, 2000 - 32% valuation of the benefit granted and (b) determination of the proportion
The tax imposed under Sec. 33 of the Code shall be treated as a final or percentage of the benefit which is subject to the fringe benefit tax.
income tax on the employee which shall be withheld and paid by the That the Tax Code allows for the cases where only a portion (i.e. less
employer on a calendar quarterly basis as provided under Sec. 57 (A) than 100 per cent) of the fringe benefit is subject to the fringe benefit
(Withholding of Final Tax on certain Incomes) and Sec. 58 A tax is clearly stated in Section 33 (a) of R.A. 8424 which stipulates that
(Quarterly Returns and Payments of Taxes Withheld) of the Code. fringe benefits which are "required by the nature of, or necessary to the
The grossed-up monetary value of the fringe benefit shall be trade, business or profession of the employer, or when the fringe
determined by dividing the monetary value of the fringe benefit by the benefit is for the convenience or advantage of the employer" are not
following percentages and in accordance with the following schedule: subject to the fringe benefit tax. Thus, in cases where the fringe
Effective January 1, 1998 - 66% benefits entail joint benefits to the employer and employee, the portion
Effective January 1, 1999 - 67% which shall be subject to the fringe benefits tax and the guidelines for
Effective January 1, 2000 - 68% the valuation of fringe benefits are defined under these rules and
regulations.
Unless otherwise provided in these regulations, the valuation of fringe (B) Definition of Fringe Benefit In general, except as otherwise
benefits shall be as follows: provided under these regulations, for purposes of this Section, the term
(1) If the fringe benefit is granted in money, or is directly paid for "FRINGE BENEFIT" means any good, service, or other benefit
by the employer, then the value is the amount granted or paid for. furnished or granted by an employer in cash or in kind, in addition to
(2) If the fringe benefit is granted or furnished by the employer in basic salaries, to an individual employee (except rank and file
property other than money and ownership is transferred to the employee as defined in these regulations) such as, but not limited to
employee, then the value of the fringe benefit shall be equal to the fair the following:
market value of the property as determined in accordance with Sec. 6 (1) Housing;
(E) of the Code (Authority of the Commissioner to Prescribe Real (2) Expense account;
Property Values). (3) Vehicle of any kind;
(3) If the fringe benefit is granted or furnished by the employer in (4) Household personnel, such as maid, driver and others;
property other than money but ownership is not transferred to the (5) Interest on loan at less than market rate to the extent of the
employee, the value of the fringe benefit is equal to the depreciation difference between the market rate and actual rate granted;
value of the property. (6) Membership fees, dues and other expenses borne by the
Taxation of fringe benefit received by a non-resident alien employer for the employee in social and athletic clubs or other similar
individual who is not engaged in trade or business in the Philippines organizations;
A fringe benefit tax of twenty-five percent (25%) shall be imposed (7) Expenses for foreign travel;
on the grossed-up monetary value of the fringe benefit. The said tax (8) Holiday and vacation expenses;
base shall be computed by dividing the monetary value of the fringe (9) Educational assistance to the employee or his dependents; and
benefit by seventy-five per cent (75%). (10) Life or health insurance and other non-life insurance premiums
Taxation of fringe benefit received by (1) an alien individual employed or similar amounts in excess of what the law allows.
by regional or area headquarters of a multinational company or by For this purpose, the guidelines for valuation of specific types of fringe
regional operating headquarters of a multinational company; (2) an benefits and the determination of the monetary value of the fringe
alien individual employed by an offshore banking unit of a foreign benefits are give below. The taxable value shall be the grossed-up
bank established in the Philippines; (3) an alien individual employed monetary value of the fringe benefit.
by a foreign service contractor or by a foreign service subcontractor (1) Housing privilege
engaged in petroleum operations in the Philippines; and (4) any of (a) If the employer leases a residential property for the use of his
their Filipino individual employees who are employed and occupying employee and the said property is the usual place of residence of the
the same position as those occupied or held by the alien employees. employee, the value of the benefit shall be the amount of rental paid
A fringe benefit tax of fifteen per cent (15%) shall be imposed on the thereon by the employer, as evidenced by the lease contract. The
grossed-up monetary value of the fringe benefit. The said tax base monetary value of the fringe benefit shall be fifty per cent (50%) of the
shall be computed by dividing the monetary value of the fringe benefit value of the benefit.
by eighty-five per cent (85%). (b) If the employer owns a residential property and the same is
Taxation of fringe benefit received by employees in special economic assigned for the use of his employee as his usual place of residence,
zones Fringe benefits received by employees in special economic the annual value of the benefit shall be five per cent (5%) of the
zones, including Clark Special Economic Zone and Subic Special market value of the land and improvement, as declared in the Real
Economic and Free Trade Zone, are also covered by these regulations Property Tax Declaration Form, or zonal value as determined by the
and subject to the normal rate of fringe benefit tax or the special rates Commissioner pursuant to Section 6(E) of the Code (Authority of the
of 25% or 15% as provided above. Commissioner to Prescribe Real Property Values), whichever is
higher. The monetary value of the fringe benefit shall be fifty per cent the business if it is located within the maximum of fifty (50) meters
(50%) of the value of the benefit. cda from the perimeter of the business premises.
The monetary value of the housing fringe benefit is equivalent to the (h) Temporary housing for an employee who stays in a housing
following: unit for three (3) months or less shall not be considered a taxable
MV = [5%(FMV or ZONAL VALUE] X 50% fringe benefit.
WHERE: (2) Expense account
MV = MONETARY VALUE (a) In general, expenses incurred by the employee but which are
FMV = FAIR MARKET VALUE paid by his employer shall be treated as taxable fringe benefits, except
(c) If the employer purchases a residential property on installment when the expenditures are duly receipted for and in the name of the
basis and allows his employee to use the same as his usual place of employer and the expenditures do not partake the nature of a personal
residence, the annual value of the benefit shall be five per cent (5%) of expense attributable to the employee.
the acquisition cost, exclusive of interest. The monetary value of fringe (b) Expenses paid for by the employee but reimbursed by his
benefit shall be fifty per cent (50%) of the value of the benefit. employer shall be treated as taxable benefits except only when the
(d) If the employer purchases a residential property and transfers expenditures are duly receipted for and in the name of the employer
ownership thereof in the name of the employee, the value of the and the expenditures do not partake the nature of a personal expense
benefit shall be the employer's acquisition cost or zonal value as attributable to the said employee.
determined by the Commissioner pursuant to Section 6(E) of the Code (c) Personal expenses of the employee (like purchases of groceries
(Authority of the Commissioner to Prescribe Real Property Values), for the personal consumption of the employee and his family
whichever is higher. The monetary value of the fringe benefit shall be members) paid for or reimbursed by the employer to the employee
the entire value of the benefit. shall be treated as taxable fringe benefits of the employee whether or
(e) If the employer purchases a residential property and transfers not the same are duly receipted for in the name of the employer.
ownership thereof to his employee for the latter's residential use, at a (d) Representation and transportation allowances which are fixed
price less than the employer's acquisition cost, the value of the benefit in amounts and are regular received by the employees as part of their
shall be the difference between the fair market value, as declared in the monthly compensation income shall not be treated as taxable fringe
Real Property Tax Declaration Form, or zonal value as determined by benefits but the same shall be considered as taxable compensation
the Commissioner pursuant to Sec. 6(E) of the Code (Authority of the income subject to the tax imposed under Sec. 24 of the Code.
Commissioner to Prescribe Real Property Values), whichever is (3) Motor vehicle of any kind
higher, and the cost to the employee. The monetary value of the fringe (a) If the employer purchases the motor vehicle in the name of the
benefit shall be the entire value of the benefit. employee, the value of the benefit is the acquisition cost thereof. The
(f) Housing privilege of military officials of the Armed Forces of monetary value of the fringe benefit shall be the entire value of the
the Philippines (AFP) consisting of officials of the Philippine Army, benefit, regardless of whether the motor vehicle is used by the
Philippine Navy and Philippine Air Force shall not be treated as employee partly for his personal purpose and partly for the benefit of
taxable fringe benefit in accordance with the existing doctrine that the his employer.
State shall provide its soldiers with necessary quarters which are (b) If the employer provides the employee with cash for the
within or accessible from the military camp so that they can be readily purchase of a motor vehicle, the ownership of which is placed in the
on call to meet the exigencies of their military service. name of the employee, the value of the benefits shall be the amount of
(g) A housing unit which is situated inside or adjacent to the cash received by the employee. The monetary value of the fringe
premises of a business or factory shall not be considered as a taxable benefit shall be the entire value of the benefit regardless of whether the
fringe benefit. A housing unit is considered adjacent to the premises of motor vehicle is used by the employee partly for his personal purpose
and partly for the benefit of his employer, unless the same was (h) The use of yacht whether owned and maintained or leased by
subjected to a withholding tax as compensation income under Revenue the employer shall be treated as taxable fringe benefit. The value of the
Regulations No. 2-98. benefit shall be measured based on the depreciation of a yacht at an
(c) If the employer purchases the car on installment basis, the estimated useful life of 20 years.
ownership of which is placed in the name of the employee, the value (4) Household expenses Expenses of the employee which are
of the benefit shall be the acquisition cost exclusive of interest, divided borne by the employer for household personnel, such as salaries of
by five (5) years. The monetary value of the fringe benefit shall be the household help, personal driver of the employee, or other similar
entire value of the benefit regardless of whether the motor vehicle is personal expenses (like payment for homeowners association dues,
used by the employee partly for his personal purpose and partly for the garbage dues, etc.) shall be treated as taxable fringe benefits.
benefit of his employer. (5) Interest on loan at less than market rate
(d) If the employer shoulders a portion of the amount of the (a) If the employer lends money to his employee free of interest or
purchase price of a motor vehicle the ownership of which is placed in at a rate lower than twelve per cent (12%), such interest foregone by
the name of the employee, the value of the benefit shall be the amount the employer or the difference of the interest assumed by the employee
shouldered by the employer. The monetary value of the fringe benefit and the rate of twelve per cent (12%) shall be treated as a taxable
shall be the entire value of the benefit regardless of whether the motor fringe benefit.
vehicle is used by the employee partly for his personal purpose and (b) The benchmark interest rate of twelve per cent (12%) shall
partly for the benefit of his employer. remain in effect until revised by a subsequent regulation.
(e) If the employer owns and maintains a fleet of motor vehicles (c) This regulation shall apply to installment payments or loans
for the use of the business and the employees, the value of the benefit with interest rate lower than twelve per cent (12%) starting January 1,
shall be the acquisition cost of all the motor vehicles not normally used 1998.
for sales, freight, delivery service and other non-personal used divided (6) Membership fees, dues, and other expenses borne by the
by five (5) years. The monetary value of the fringe benefit shall be employer for his employee, in social and athletic clubs or other similar
fifty per cent (50%) of the value of the benefit. organizations. These expenditures shall be treated as taxable fringe
The monetary value of the motor vehicle fringe benefit is equivalent to benefits of the employee in full.
the following: (7) Expenses for foreign travel
MV = [(A)/5] X 50% (a) Reasonable business expenses which are paid for by the
where: employer for the foreign travel of his employee for the purpose of
MV = Monetary value attending business meetings or conventions shall not be treated as
A = acquisition cost taxable fringe benefits. In this instance, inland travel expenses (such as
(f) If the employer leases and maintains a fleet of motor vehicles expenses for food, beverages and local transportation) except lodging
for the use of the business and the employees, the value of the benefit cost in a hotel (or similar establishments) amounting to an average of
shall be the amount of rental payments for motor vehicles not normally US$300.00 or less per day, shall not be subject to a fringe benefit tax.
used for sales, freight, delivery, service and other non-personal use. The expenses should be supported by documents proving the actual
The monetary value of the fringe benefit shall be fifty per cent (50%) occurrences of the meetings or conventions.
of the value of the benefit. The cost of economy and business class airplane ticket shall not be
(g) The use of aircraft (including helicopters) owned and subject to a fringe benefit tax. However, 30 percent of the cost of first
maintained by the employer shall be treated as business use and not be class airplane ticket shall be subject to a fringe benefit tax.
subject to the fringe benefits tax. (b) In the absence of documentary evidence showing that the
employee's travel abroad was in connection with business meetings or
conventions, the entire cost of the ticket, including cost of hotel of any other existing law; and (b) the cost of premiums borne by the
accommodations and other expenses incident thereto shouldered by the employer for the group insurance of his employees.
employer, shall be treated as taxable fringe benefits. The business (C) Fringe Benefits Not Subject to Fringe Benefits Tax In
meetings shall be evidenced by official communications from business general, the fringe benefits tax shall not be imposed on the following
associates abroad indicating the purpose of the meetings. Business fringe benefits:
conventions shall be evidenced by official invitations/communications (1) Fringe benefits which are authorized and exempted from
from the host organization or entity abroad. Otherwise, the entire cost income tax under the Code or under any special law;
thereof shouldered by the employer shall be treated as taxable fringe (2) Contributions of the employer for the benefit of the employee
benefits of the employee. to retirement, insurance and hospitalization benefit plans;
(c) Travelling expenses which are paid by the employer for the (3) Benefits given to the rank and file, whether granted under a
travel of the family members of the employee shall be treated as collective bargaining agreement or not;
taxable fringe benefits of the employee. (4) De minimis benefits as defined in these Regulations;
(8) Holiday and vacation expenses Holiday and vacation (5) If the grant of fringe benefits to the employee is required by
expenses of the employee borne by his employer shall be treated as the nature of, or necessary to the trade, business or profession of the
taxable fringe benefits. employer; or
(9) Educational assistance to the employee or his dependents (6) If the grant of the fringe benefit is for the convenience of the
(a) The cost of the educational assistance to the employee which employer.
are borne by the employer shall, in general, be treated as taxable fringe The exemption of any fringe benefit from the fringe benefit tax
benefit. However, a scholarship grant to the employee by the employer imposed under this Section shall not be interpreted to mean exemption
shall not be treated as taxable fringe benefit if the education or study from any other income tax imposed under the Code except if the same
involved is directly connected with the employer's trade, business or is likewise expressly exempt from any other income tax imposed under
profession, and there is a written contract between them that the the Code or under any other existing law. Thus, if the fringe benefit is
employee is under obligation to remain in the employ of the employer exempted from the fringe benefits tax, the same may, however, still
for period of time that they have mutually agreed upon. In this case, form part of the employee's gross compensation income which is
the expenditure shall be treated as incurred for the convenience and subject to income tax, hence, likewise subject to a withholding tax on
furtherance of the employer's trade or business. compensation income payment.
(b) The cost of educational assistance extended by an employer to The term "DE MINIMIS" benefits which are exempt from the fringe
the dependents of an employee shall be treated as taxable fringe benefit tax shall, in general, be limited to facilities or privileges
benefits of the employee unless the assistance was provided through a furnished or offered by an employer to his employees that are of
competitive scheme under the scholarship program of the company. relatively small value and are offered or furnished by the employer
(10) Life or health insurance and other non-life insurance premiums merely as a means of promoting the health, goodwill, contentment, or
or similar amounts in excess of what the law allows The cost of life efficiency of his employees such as the following:
or health insurance and other non-life insurance premiums borne by (1) Monetized unused vacation leave credits of employees not
the employer for his employee shall be treated as taxable fringe exceeding ten (10) days during the year;
benefit, except the following: (a) contributions of the employer for the (2) Medical cash allowance to dependents of employees not
benefit of the employee, pursuant to the provisions of existing law, exceeding P750 per semester or P125 per month;
such as under the Social Security System (SSS), (R.A. No. 8282, as (3) Rice subsidy of P350 per month granted by an employer to his
amended) or under the Government Service Insurance System (GSIS) employees;
(R.A. No. 8291), or similar contributions arising from the provisions (4) Uniforms given to employees by the employer;
(5) Medical benefits given to the employees by the employer; Monthly rental for the residential house P66,000.00
(6) Laundry allowance of P150 per month; Grossed-up monetary benefit granted
(7) Employee achievement awards, e.g. for length of service or (P66,000.00 divided by 66% factor for
safety achievement, which must be in the form of a tangible personal calendar year 1998 times 50% taxable portion) P50,000.00
property other than cash or gift certificate, with an annual monetary
value not exceeding one-half () month of the basic salary of the Fringe benefit tax due thereon (34%) P17,000.00
employee receiving the award under an established written plan which =========
does not discriminate in favor of highly paid employees; dctai ABC Corporation shall take up in its books of accounts the P66,000.00
(8) Christmas and major anniversary celebrations for employees fringe benefit furnished to Mr. Dela Cruz, under account title "Fringe
and their guests; Benefit Expense" and the amount of 17,000.00 under the account title
(9) Company picnics and sports tournaments in the Philippines "Fringe Benefit Tax Expense". The aforesaid amounts shall be fully
and are participated exclusively by employees; and allowed as deductions from the gross income of ABC Corporation and
(10) Flowers, fruits, books or similar items given to employees shall be taken up in the said employer's books of accounts as follows:
under special circumstances, e.g. on account of illness, marriage, birth Debit: Fringe Benefit Expense P66,000
of a baby, etc Debit: Fringe Benefit Tax Expense P17,000
(D) Tax Accounting for the Fringe Benefit Furnished to the Credit: Cash P83,000
Employee and the Fringe Benefit Tax Due Thereon. As a general To record fringe benefit expense and fringe benefit tax paid on rental
rule, the amount of taxable fringe benefit and the fringe benefits tax of the residential property furnished to Mr. Dela Cruz for his
shall constitute allowable deductions from gross income of the residential use. (Note: If the fringe benefit expense of P66,000.00 has
employer. However, if the basis for computation of the fringe benefits already accrued but not yet paid, use the account title "fringe benefit
tax is the depreciation value, the zonal value as determined by the payable". If the fringe benefit tax has already accrued but not yet paid,
Commissioner pursuant to Section 6(E) of the Code or the fair market use the account title "fringe benefit tax payable").
value as determined in the current real property tax declaration of a (2) XYZ Corporation owns a condominium unit. During the year
certain property, only the actual fringe benefits tax paid shall constitute 1998, the said corporation furnished and granted the said property for
a deductible expense for the employer. The value of the fringe benefit the residential use of its Assistant Vice-President. The fair market
shall not be deductible and shall be presumed to have been tacked on value of the said property as determined by the Commissioner
or actually claimed as depreciation expense by the employer. pursuant to Section 6(E) of the Code amounts P10,000,000.00 while its
Provided, however, that if the aforesaid zonal value or fair market fair market value as shown in its current Real Property Tax
value of the said property is greater than its cost subject to Declaration amounts to P8,000,000.00. In this case, the higher fair
depreciation, the excess amount shall be allowed as a deduction from market value of P10,000,000.00 as determined by the Commissioner
the employer's gross income as fringe benefit expense. shall be used in computing the monetary of the fringe benefit so
Illustrations on fringe benefit furnished or granted by the employer to furnished or granted to said employee and the fringe benefit tax due
an employee (other than a rank-and-file employee) thereon shall be computed as follows:
(1) During the year 1998, ABC Corporation paid for the monthly Monthly rental value of the property
rental of a residential house of its branch manager (Mr. Dela Cruz) (P10,000,000 times 5% thereof times 50%
amounting to P66,000.00. divided by 12 months) P20,833.33
In this case, the monthly taxable grossed-up monetary value of the said Grossed-up monetary value thereof as fringe
fringe benefit furnished or granted to its branch manager (Mr. Dela benefit (P20,833.33 divided by 66% factor for
Cruz) shall be P50,000.00, computed as follows: calendar year 1998) P31,565.66
Fringe Benefit tax due thereon (34%) P10,732.32 REPEALING CLAUSE All existing rules and regulations or parts
========= thereof which are inconsistent with the provisions of these regulations
In general, under this illustration, the XYZ Corporation shall not are hereby revoked. LibLex
further claim deduction for allowing its Assistant Vice-President the EFFECTIVITY These regulations shall take effect on fringe
use of its residential property since the cost for the use thereof has benefits furnished, granted or paid beginning January 1, 1998.
already been recovered as deduction from its gross income under TRANSITORY PROVISIONS No penalty shall be imposed for late
"Depreciation Expense". However, since the fringe benefit tax in the payment of the fringe benefit tax for the first quarter ending March
amount of P10,732.32, assumed and paid by XYZ corporation has not 1998: Provided, however, that the withholding tax return for the first
as yet been recovered by way of deduction from gross income, the quarter shall be filed and the tax is paid not later than July 25, 1998.
same shall be allowed as a deduction from its gross income. XYZ
Corporation shall take up the foregoing in its books of accounts, as
follows:
Debit: Fringe Benefit Tax Expense P10,732.32
Credit: Cash/Fringe Benefit Tax Payable P10,732.32
To record fringe benefit tax expense for the
residential property furnished to employees.
However, if the cost of the aforesaid condominium unit subject to
depreciation allowance (example: its acquisition cost is only
P7,000,000.00) is lesser that its fair market value as determined by the
Commissioner (i.e. P10,000,000.00), the excess amount (i.e.
P3,000,000.00) shall be amortized throughout the remaining estimated
useful life of the residential property used in computing the said
employer's depreciation expense and allowed as a deduction from the
said employer's gross income as fringe benefit expense. Thus, if the
remaining estimated useful life thereof during the year 1998 is fifteen
(15) years, its monthly amortization shall be computed as follows:
Monthly amortization (P3,000,000.00 divided by
15 years divided by 12 months) P16,666.67
In this case, XYZ Corporation shall take up the foregoing in its books
of accounts as follows:
Debit: Fringe benefit expense P16,666.67
Debit: Fringe benefit tax P10,732.32
Credit: Income constructively realized P16,666.67
Credit: Cash/Fringe benefit tax payable P10,732.32
To record fringe benefit and fringe benefit tax expenses and income
constructively realized from the use of company-owned residential
property furnished to employees.