De Minimis Benefits
received by an employee by virtue of a
 Monetized unused vacation leave
credits of private employees not
exceeding 10 days during the year.
 Monetized value of vacation and sick
leave credits paid to government
officials and employees.
 Medical cash allowance to dependents
of employees not exceeding P1,500 per
employee per semester or P250 per
month.
 Rice subsidy of P2000 or one sack of 50
KG rice per month amounting to not
more than P2,000.
 Uniform and clothing allowance not
exceeding P6,000 per annum.
 Actual medical assistance, e.g., medical
allowance to cover medical and health
care needs, annual medical/executive
check-up, maternity assistance, and
routine consultations, not exceeding
P10,000 per month.
 Laundry allowance not exceeding P300
per month.
 Employee achievement awards, e.g., for
length of service or safety achievement,
which must be in the form of a tangible
personal property other than cash or gift
certificate, with an annual monetary
value not exceeding P10,000 received by
the employee under an established
written plan which does not discriminate
in favor of highly paid employee.
 Gifts given during Christmas and major
anniversary celebrations not exceeding
P5,000 per employee per annum.
 Daily meal allowance for overtime work
and night/graveyard shift not exceeding
25% of the basic minimum wage on a per
region basis.
 Starting January 1, 2015, benefits
collective bargaining agreement (CBA)
and productivity incentives schemes,
provided that the total annual monetary
value received from the two combined,
do not exceed P10,000 per employee
per taxable year.
Fringe Benefits
Any goods, serviced or other benefits furnished
or granted in cash or in kind by an employer to
an individual employee (except rank and file
employees) such as, but not limited to the
following:
1. Housing
2. Expense account
3. Vehicle of any kind
4. Household personnel
5. Interest on loan at less than market rate
6. Membership fees, dues and other
expenses borne by the employer
7. Expenses for foreign travel
8. Holiday and vacation expenses
9. Educational assistance to the employees
or his dependents.
10. Life or health insurance and other non-
life insurance premiums or similar
amounts in excess of what the law
allows.
Benefits not subject to Fringe Benefits Tax (FBT)
1. Those authorized and exempted from
income tax under the Code or under
special law;
2. Contributions of the employer for the
benefit of the employee, to retirement,
insurance, and hospitalization benefits
plans.
 3. Benefits given to rank and file, whether, Housing Benefit Monetary Value
granted under a collective bargaining or Employer leases a
not. residential property
Rental paid x 50%
4. De minimis benefits for the use of the
5. If the grant of fringe benefits to the employee
employees is required by the nature of Employer owns FMV in the Real Prop.
or necessary to the trade, business or residential property Declaration or ZV,
for the use of the whichever is higher,
profession of the employer.
employee x 5% x50%
6. If the grant of fringe benefits is for the
Employer purchases
convenience or advantage of the
residential property Acq. Cost exclusive of
employer. in installments for interest x 5% x 50%
use of employee
Gross up Employer purchases
Year Tax Rate
Divisor residential property
1998 66% 34% Acq. Cost or ZV
and transfers
1999 67% 33% whichever is higher
ownership to
2000 to employee
68% 32%
2017 Employer purchases FMV in the real
2018 65% 35% property and property declaration
transfers ownership or ZV, whichever is
to employee on a higher, less cost to
The tax imposed is payable by the employer. lesser amount the employee

Computation of fringe benefit tax: Motor Vehicle Monetary Value

Employer owns and
𝑀𝑜𝑛𝑒𝑡𝑎𝑟𝑦 𝑉𝑎𝑙𝑢𝑒 maintains a fleet of (Acq. Cost of vehicles
𝐺𝑟𝑜𝑠𝑠𝑒𝑑 𝑢𝑝 𝑚𝑜𝑛𝑒𝑡𝑎𝑟𝑦 𝑣𝑎𝑙𝑢𝑒 =
65% motor vehicles for not normally used in
𝑀𝑜𝑛𝑒𝑡𝑎𝑟𝑦 𝑉𝑎𝑙𝑢𝑒 the use of the business/5 years) x
𝐹𝐵𝑇 = ( ) 𝑥 35% business and 50%
65%
employees
Employer leases
Rental Payment x
vehicles for the use
Benefit Monetary Value 50%
of the employees
Money Amount of Money
Employer purchases
Property with FMV vs ZV,
vehicles in the name Acquisition cost
transfer of ownership whichever is higher
of the employee
Property ownership
Depreciation value Employer provided
is not transferred
employee with cash
Employer lends
Principal x (12% less for the purchase of
money at a rate the vehicle and Cash received
actual rate)
lower than 12% ownership is placed
in the name of the
employee
Employer purchases Acquisition cost,
the vehicle in exclusive of interest
installment and /by 5 years
 ownership is placed foregone by the employer or the
in the name of the difference of the interest assumed
employee by the employee and the rate of
Employer shoulders a 12% shall be treated as taxable
portion of the Fringe benefit.
amount of the  Membership fees, dues, etc.:
purchase price of the Amount shouldered o Membership fees, dues and other
vehicle and by employer
expenses borne by the employer
ownership is placed
for his employee, in social and
in the name of the
employee athletic clubs or other similar
The use of yacht organizations shall be treated as
Depreciation of yacht taxable fringe benefits of the
whether owned and
at an estimated employee in full.
maintained or leased
useful life of 20 years
by the employer  Expenses for foreign travel:
o Foreign travel expenses not
subject to FBT if properly
Housing benefits not considered as taxable
substantiated by proof:
fringe benefits;

 Housing privilege of military officials of the  Reasonable business expenses

Armed Forces of the Philippines consisting
of officials of the Philippine Army,
Philippine Navy and the Philippine Air
Force.
 A housing unit which is situated inside or
within the maximum of fifty meters from
the perimeter of the business premises or
factory.
 Temporary housing for an employee who
stays in a housing unit for three months or
less.
 Expense Account:
o Expenses incurred by the employee
but which are paid or reimbursed
by his employer.
 Household Expenses:
o Salaries of household help or
personal driver of the employee
borne by the employer.
 Interest on loan:
o If the employer lends money to his
employee free of interest of at a
lower rate than 12%, such interest
paid for by the employer for
his employees who will attend
business meetings or
conventions abroad.
 Inland travel expenses in
connection with the foreign
travel (food, beverages and
local transportation) except
lodging cost in a hotel
amounting to an average of
$300 or less per day, shall not
be subject to a fringe benefit
tax.
 The cost of economy and
business class airplane ticket.
However, thirty percent (30%)
of the cost of first-class
airplane ticket shall be subject
to fringe benefit tax.
 Holiday and vacation expenses:
o Holiday and vacation expenses of
the employee borne by the
employer is subject to FBT.
 Educational assistance to the employee
or his dependent:
o Scholarship grant to the employee
by the employer shall not be
treated as taxable fringe benefit if:
 The education or study
involved is directly connected
with the employer’s trade,
business or profession.
 The employee is under
obligation to remain in the
employ of the employer for
the period of the time that
they have mutually agreed
upon.
o The cost of the educational
assistance extended by an
employer to the dependent of an
employee shall be treated as
taxable fringe benefit of the
employee, unless the assistance
was provided through a
competitive scheme under the
scholarship program of the
company.
 Insurance Premium
o The cost of the life or health and
other non-life insurance
premiums borne by the employer
for his employee shall be treated
as taxable fringe benefit, except:
 Contribution of the employer
for the benefit of the
employee, pursuant to the
provisions of the existing laws,
such as under the SSS, GSIS
and other similar
contributions arising from the
provision of any other existing
law.
 Premiums by the employer for
the group insurance of his
employees.