The Department of Finance has issued Revenue Regulations 29-2025 on 22 December 2025, raising the thresholds for De Minimis benefits those small but valuable perks that are tax-free for your employees.
These changes mean more allowance for everyday benefits like rice, clothing, medical support, laundry, and even achievement awards helping you give your team a little extra while staying compliant.
Effective Date
The new thresholds take effect on 6 January 2026, 15 days after publication on the BIR website.
With PayrollPlus by Mustard Seed Systems, managing these updates is simple:
- Automatically compute De Minimis benefits according to the new BIR thresholds.
- Generate accurate payroll and government reports easily.
- Track allowances, bonuses, and awards for all employees.
- Employees can view payslips anytime through the Self-Service Portal, making payroll transparent and accessible.
Key Updates for 2026
These 2026 De Minimis updates allow employers to offer more value to their employees without any additional tax liability. It’s a simple way to boost morale, reward performance, and start the year right!
Make 2026 a year of growth, perks, and happy employees with the updated De Minimis benefits.
Frequently Asked Questions
De Minimis Benefits are employee benefits that are exempt from income tax, withholding tax on compensation, and fringe benefit tax, provided they do not exceed the limits set by the Bureau of Internal Revenue (BIR). These benefits help employers provide additional employee perks without increasing tax liability.
Revenue Regulations (RR) No. 29-2025 updates the non-taxable ceilings for several De Minimis Benefits. The revised limits took effect on January 6, 2026, allowing employers to provide higher tax-free benefits to employees.
RR No. 29-2025 increased the tax-exempt ceilings for several benefits, including rice subsidy, uniform and clothing allowance, medical cash allowance for dependents, medical assistance, laundry allowance, employee achievement awards, Christmas and anniversary gifts, monetized leave credits, and certain productivity incentive benefits.
The updated non-taxable benefit limits became effective on January 6, 2026. Employers should apply the new thresholds when processing qualified employee benefits.
Using outdated limits may result in incorrect tax computations, payroll adjustments, and compliance issues. Updating payroll systems ensures employees receive the correct tax-exempt benefits while helping employers comply with BIR regulations.
No. De Minimis Benefits are generally employer-provided benefits. However, if granted, they must comply with the limits and conditions prescribed by the BIR to qualify for tax exemption.
The higher non-taxable limits allow employees to receive greater benefits without additional income tax, increasing their overall take-home value while helping employers offer more competitive compensation packages.
Yes. PayrollPlus by Mustard Seed Systems helps employers configure updated De Minimis Benefit ceilings, automate payroll computations, calculate withholding taxes accurately, and ensure payroll remains compliant with the latest BIR regulations.
Businesses should review their compensation policies, update payroll settings, monitor BIR issuances, and use a compliant payroll solution like PayrollPlus by Mustard Seed Systems to automate payroll processing and statutory tax calculations.
PayrollPlus by Mustard Seed Systems helps businesses automate payroll, apply updated De Minimis Benefit limits, compute withholding taxes, generate payroll reports, and support compliance with Philippine payroll and tax regulations.
