Higher exemption for rice and uniform allowances
Higher exemption thresholds for rice and uniform/clothing allowances (Revenue Regulations No. 5-2008)
Effective beginning May 10, 2008, employees receiving the following benefits from their employers shall enjoy higher tax exemption thresholds:
- Rice allowance - from the current P1,000 per month to P1,500
- Uniform and clothing allowance - from the current P3,000 per year to P4,000
These allowances are classified as de minimis benefits and are exempt from the tax on compensation when given to rank and file employees and from the fringe benefits tax (FBT) when given to managerial and supervisory employees. De minimis benefits are facilites and privileges of relatively small value which are given by employers as a means of promoting health, goodwill, contentment or efficiency of their employees. These thresholds were last set in year 2000.
Copy of the regulations is attached for your reference
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