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What is Fringe Benefit?

Any good, service or other benefit
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 ff:
1) housing
2) expense account
3) vehicle of any kind
4) household personnel (such as maid,
driver & others)

5) interest on loan at less than market rate to the

extent of the difference between the market rate &
actual rate granted
6) membership fees, dues & other expenses borne by
the employer for the employee in social & athletic
clubs or other similar org.
7) expenses for foreign travel
8) holiday & vacation expenses
9) educational assistance to the employee or his
10) life or health insurance & other non-life insurance
premiums or similar amounts in excess of what the law

Nature of FBT:
Final tax imposed on the grossed-up monetary value of
fringe benefit furnished/granted to the EE by the ER,
whether an individual or corp. (payable by the employer)
Fringe benefit is an income of the employee subject to
Fringe Benefit Tax but is payable by the Employer. Er can
deduct FBT from its taxable income.

Fringe benefits are only for corporate officers/management.

For rank and file, it is called an allowance. Allowances
(benefits to rank and file) are not subject to FBT.

FB not subject to FBT

(a) FB authorized & exempted from
tax under special laws
(b) Contributions of ER for the benefit
of the employee to retirement,
insurance & hospitalizations benefit plan
(c) Benefits given to the rank & file
employees, whether granted under a CBA
or not
(d) De minimis benefits

De Minimis Benefits
a) Monetized unused vacation leave credits
of private employees not exceeding 10
days during the year and monetized value of
leave credits paid to government officials
and employees
b) Medical cash allowance to dependents
of employees not exceeding P750 per
semester or P125 per month
c) Rice subsidy of P1,500 or 1 sack of 50
kg rice amounting to not more than P1,500

d) Uniform and clothing allowance not

exceeding P5,000 per year
e) Actual yearly medical benefits not exceeding
f) Laundry allowance of P300 per month
g) Employee achievement awards, for length of
service or safety achievement in the form of
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 employees

h) Christmas and major anniversary

celebrations not exceeding P5,000 per
employee per annum
Flowers, fruits, books or similar items
given to employees under special
circumstances on account of illness,
marriage, birth of a baby, etc
Daily meal allowance of overtime work
not exceeding 25% of basic minimum wage