Amendments on compensation tax

Aside from introducing changes in final and expanded withholding taxes, the recently issued BIR Revenue Regulation (RR) No. 11-2018 increases the ceiling of some of the de minimis benefits and further clarifies the extent of minimum wage earners’ (MWEs) exemption from income tax and withholding tax on compensation.

The table below summarizes the salient provisions on compensation taxes:

The de minimis benefits pertaining to the following will remain unchanged:

- Monetized unused vacation leave credits of private employees not exceeding 10 days during the year;

- Monetized unused vacation and sick leave credits paid to government officials and employees;

- Actual medical benefits at P10,000 per annum;

- Laundry allowance at P300 per month;

- Employees achievement awards in the form of tangible personal properties valued at P10,000 per annum;

- Gifts given during Christmas and major anniversary celebrations at P5,000 per annum;

- Daily meal allowance for overtime work at 25 percent of the basic minimum wage; and

- Benefits received by virtue of a collective bargaining agreement and productivity incentive scheme at P10,000 per annum.

Certified Public Accountants Punongbayan & Araullo (P&A) is the Philippine member firm of Grant Thornton International Ltd.