Fringe Benefit / De Minimis

Question 1

When the study is directly connected with the employer’s trade, business or profession and there is a written contract between the employee and employer that the former is under obligation to remain in the employ of the employer for a period of time

Answer 1

Not taxable as fringe benefit

Question 2

When given to employee’s dependents through a competitive scheme under scholarship program of the company.

Answer 2

Not taxable as fringe benefit

Question 3

Representation and transportation allowance given regularly on a monthly basis

Answer 3

Not taxable as fringe benefit

Question 4

How much of the cost of first class airplane ticket is subject to fringe benefit

Answer 4

30%

Question 5

Traveling expense of family members of employees paid for by employer

Answer 5

Taxable fringe benefit

Question 6

Benefits given to rank and file employees

Answer 6

Not taxable fringe benefit

Question 7

Laundry allowance

Answer 7

300/month or 3,600/year

Question 8

Gifts given during Christmas and major anniversary celebrations

Answer 8

5,000 per employee per annum

NOT BONUS

Question 9

Actual medical assistance

Answer 9

10,000 per year

Question 10

Medical cash allowance to dependents of employees

Answer 10

1,500 per semester or 250/month

3,000 per year

Question 11

Monetized value of vacation/sick leave

Answer 11

If government
- No limit
- Vacation AND Sick leave

If private employees
- <10 days
- Vacation ONLY
- excess goes to 90k ceiling

Question 12

Uniforms given to employees by the employer

Answer 12

6,000 per year

Question 13

Rice subsidy

Answer 13

2,000 per month or 1 50kg rice per month

Question 14

Employee achievement awards

Answer 14

10,000

Question 15

Daily meal allowance for overtime work and night/graveyard

Answer 15

** 25% of the basic minimum wage on a per region basis**

Question 16

Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and Productivity incentive schemes

Answer 16

• If not more than P10,000 - considered as de minimis
• If more than P10,000 - the entire amount shall be included in the “other benefits” with P90,000 ceiling

Question 17

Fringe benefits subject to fringe benefit tax cover only those fringe benefits given or furnished to a

Answer 17

managerial or supervisory employee

Rank and file employees also receive fringe benefits but it is not subject to FBT

Question 18

FBT shall be withheld and remitted by the ______ to the BIR

Answer 18

employer

Question 19

Contributions required under SSS and GSIS law

Answer 19

Tax exempt fringe benefit

Question 20

Premiums for group insurance of employees

Answer 20

Tax exempt fringe benefit

Question 21

Computation of FBT

Answer 21

RC, NRC, RA, NRA-ETB
- Monetary value / 65% = Grossed-up MV x 35%

NRA-NETB
- Monetary value /75% = Grossed-up MV x 25%

Question 22

Deductible expense of employer

Answer 22

If NOT subject to FBT:
- Monetary value of the Fringe Benefit

If subject to FBT:
- Fringe benefit expense and fringe benefit tax expense

Question 23

• Christmas bonus
• Productivity incentive bonus
• Loyalty awards
• Gifts in cash or in kind and other benefits of similar nature actually received by officials and employees of both government and private offices

Answer 23

Other benefits that are EXEMPT

Question 24

Communication allowance

Answer 24

Not subject to FBT

Question 25

Special Rule

Employer leases a residential property for the use of his employee

Answer 25

MV = Rental paid x 50%

Question 26

Special Rule

Employer owns a residential property and the same is assigned for the use of his employee

Answer 26

MV = (FMV vs. ZV, whichever is higher) x 2.5%

Question 27

Special Rule

Employer purchases a residential property on installment basis and allows employee to use the same

Answer 27

MV = AC x 2.5%

Question 28

Special Rule

Employer purchases a residential property and transfers ownership in the name of the employee

Answer 28

MV = AC vs. ZV, whichever is higher

Question 29

Special Rule

Employer purchases a residential property and transfers ownership to his employee, at a price less than AC

Answer 29

MV = (FMV vs. ZV, whichever is higher) - Cost to the employee

Question 30

Special Rule

Employer purchases motor vehicle in the name of the employee

Answer 30

MV = AC

Question 31

Special Rule

Employer provides cash for the purchase of a motor vehicle

Answer 31

MV = Cash given

Excess is added to …

Question 32

Special Rule

Employer purchases the car on installment basis, ownership of which is placed in the name of the employee

Answer 32

MV = AC/5 years

Question 33

Special Rule

Employer shoulders a portion of the amount of the purchase price of a motor vehicle the ownership of which is place in the name of the employee

Answer 33

MV = Amount shouldered by the employer

Question 34

Special Rule

Employer owns and maintains a fleet of motor vehicles for the use of the business and the employees

Answer 34

MV = AC of all motor vehicles for personal use/ 5 years x 50%

Question 35

Special Rule

Employer leases and maintains a fleet of motor vehicles for the use of the business and the employees

Answer 35

MV = Rental payments of all motor vehicles for personal use x 50%

Question 36

Filing of Returns

Answer 36

Not later than the last day of the month following the close of the quarter during which withholding was made