Does train tax reform affect the de minimis benefits in the Philippines? The answer is Yes. This update will help you to know the de minimis benefits new ceiling amount 2018 and on how to compute your withholding tax and individual income tax. After the discussion of de minimis benefits, you will learn how to compute and up to what amount of income is still not subject to tax. Well, before answering this question let us know first what is de minimis benefits?
What is de minimis benefits 2018? Here are the updates of de minimis benefits Philippines train law. Let’s start first as to what is de minimis benefits? These are benefits given by the company to the employees in addition to their regular compensation. These are subject by law or governed by special laws.
These benefits are given to the employees to recognize their efforts and contributions to the company. It is a small amount added to the compensation or salary of the employee. Learn the new updates of de minimis benefits 2019.
Before we discuss the updates, let’s understand the definition and how it is different to fringe benefits tax. You may learn other updates on Tax Reform for Acceleration and Inclusion (TRAIN) Act.
What is the meaning of this term in the field of taxation?. Well, these terms are incentives or privileges of relatively small value. Certainly, it is given by the employer to his employees either mandated by law or additional compensation according to the performance.
As of January 1, 2018, under the TRAIN Tax Law, the following are the thresholds amount 2019:
Therefore, all other incentives given by the employer not included above are “other benefits.” These additional benefits will be subject to de minimis benefits ceiling 2018 of 90,000.
Any benefits given to the employees not listed above are subject to the income tax rate. Likewise, any benefits provided beyond the de minimis amount is part of “Other Benefits,” which will be subject to a ceiling amount of 90, 000.
Here are some steps to identify taxable income:
Mr. B received rice allowance of 2, 500, and clothing allowance of 10, 000 from his employer. Other benefits are 13th-month pay of 20, 000 and other benefits of 80, 000. Mr. B receives a regular compensation income of 240, 000 in a year. Is Mr. B subject to income tax?
So, therefore, Mr. B is taxable using the income tax table.
What did we learn from this article? Well, the de minimis benefits under TRAIN law reform 2018 updated the de minimis ceiling amount. Some de minimis benefits ceiling 2019 amount is more than the previous de minimis thresholds. Importantly, knowing these updates will help you to compute the right withholding tax and personal tax under train law.
For the full issuance, kindly visit the BIR homepage.
If you like this article, make sure that others can read this by sharing this article to your friends. Your efforts is highly appreciate. If there is anything we can help you, don’t be hesitate to drop your comment below and subscribe for the latest updates.
Do you live in a place where the personal income tax rate is high? Check these countries with highest personal… Read More
You would think taxation is a serious matter and, therefore, only for 'serious' things, but there are tons of taxes… Read More