How can I set up De Minimis Benefits for my Employees?

How can I set up De Minimis Benefits for my Employees?

De Minimis benefits are a specific set of benefits in the Philippines given to employees, not subject to withholding taxes or government deductions. To find out more about the provisions of providing De Minimis, click here.

To set up De Minimis benefits, go to Company Setup>Payroll>Other Income>De minimis.  The following De Minimis benefits have already been created as a default:

  • Rice Allowance
  • Medical Dependents
  • Medical Allowance
  • Clothing Allowance
  • Laundry Allowance

You can now set the values of the De Minimis benefits. Also, you can delete or add more types of De Minimis benefits based on your company policies. Be aware, though, which types of De Minimis benefits are allowed by the BIR.

To edit a De Minimis benefit Type, click the De Minimis benefit Type.

The Edit De minimis form will pop up.

The following fields can be edited:

  • Name
  • Amount Per Month
  • Scheme
    • First Pay of the Month - the employee will receive their deminimis benefit during the first pay of the month
    • Split Equally Per Pay - the monthly deminimis benefit will be split equally among how many pay periods there are in the month
  • Rules
    • Add as non taxable income - Adds De Minimis benefits to non-taxable income
    • Reduce taxable income - Reduces taxable income by the amount of the De Minimis benefits

After editing the De Minimis, click Save. Otherise, click Cancel

Deleting the De Minimis

Admins can delete De Minimis benefit Types after they have been created. De Minimis benefit Types can be deleted one at a time or simultaneously. To delete one at a time, tick the box of the De Minimis benefit Type you would like to delete and click the Trash button next to the Add De minimis button.

When you click the Trash button, a warning prompt will pop up.

Click Yes. Otherwise, click No.

If you want to delete all De Minimis benefit Types simultaneously, click the tick box at the first column and a Trash button will appear next to the Add De minimis button.  All of the boxes will be ticked.  You can untick the boxes for the De Minimis benefit Types you do not want to delete.  Click the Trash button.

To ensure your employees will receive De Minimis benefits, turn on De Minimis in their Earnings tab by going to Employees, clicking the Employee's Name, then Earnings.

Under Entitled De Minimis, tick the box to ensure the Employee receives De Minimis benefits. Click Save.

Note: If you will be updating multiple employees we recommend you use the mass update function of the Employee Files. To find out how to mass update your employees, click here.

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