Subject to Income Tax
- Compensation Income
*Transportation, Representation and
Allowances.
*Sick Leave
*Fringe Benefits receive by the rank and file
employees.
- Tips and Gratitude (paid directly to the
employee)
- Forgiveness of Indebtedness (debtor’s
services to the creditor)
- Remuneratory Donations
- Interest on the recovery of bad debts
- Tax refund (previously deducted as an
expense)
-Resident foreign corporation received
dividends from domestic corporation (30%)
- Non-resident foreign corporation receives
dividends from domestic corporation (30%)
- Benefits exceeding to 90,000
-Interest on proceeds of insurance (under the
agreement)
-Outlives the policy of the insurance (minus
total amounts of premiums paid)
-Excess of premiums paid.
- Gift, Bequest, and Devises (in consideration
of services performed)
- Transfers (are in business motives)
- Recovery of lost income in accidents.
- Resignation
- Prizes and Awards (that did not meet the
requirements)
- GSIS, SSS, Medicare and other
contributions (exceeds to the limitation
mandated by law)
- Gains (maturity value less than 5 years)
-Minimum Wage Earner other income
(income from business or profession)
- Business Income
-Professional Income
Subject to Fringe Benefit
- Housing Benefits
- Motor vehicle of any kind.
- Expenses (incurred by the employee but are
paid or reimbursed by the employer)
- Personal expenses (by the employee but
are paid or reimbursed by the employer)
- Salaries of household help, personal driver
of the employee
- payment for homeowner’s association dues,
garbage dues of the employee.
- Interest on loan (difference of the interest
assumed by the employee and the rate of
12%)
-Membership fees and other expenses in
social and athletic clubs (born by the
employer)
- Foreign travel (without proof)
- 30% of the first-class plane ticket
- Travel expenses of the family members of
the employee (paid by the employer)
- Holiday and Vacation expenses
- Cost of educational assistance
- Cost of life or health insurance and other
non-life insurance premiums (contributions of
the employer)
- NRA NETB (25%)
 NOT Subject to Income Tax
- RATA and PERA (given to government
personnel)
*Representation and Transportation
Allowance
*General Appropriations Act and Personnel
Economic Relief Allowance
- Benefits (not exceeding to 90,000)
*ACA- Additional Compensation Allowance
*NGAs- National Government Agencies
*SUCs- State Universities and Colleges
*GOCCs- Government Owned and/or
Controlled Corporations.
*GFIs- Government Financial Institutions
*LGUs- Local Government Units
- De Minimis
*13th Month Pay, bonus, incentives
*Monetized unused Vacation leave (private
employees less than 10 days)
*Monetized value vacation and sick leave
(government employees)
*Medical cash allowance (not exceeding
1,500)
*Rice subsidy (not exceeding 2,000)
*Uniforms and clothing allowance (6,000)
*Actual medical assistance (not exceeding
10,000)
*Laundry allowance (not exceeding 300 per
month)
*Employees’ achievement awards (not
exceeding 10,000)
*Gifts (not exceeding 5,000)
*Benefits by virtue of a CBA (not exceeding
10,000)
- Forgiveness of Indebtedness (no services
but the creditor condones the debt)
- Tax Refund (tax was not previously
deducted as an expense)
- Domestic Corporation receives dividends
from domestic and resident foreign
corporation.
- Resident and Nonresident Foreign
Corporation receives dividends from foreign
corporation.
- Tax informer’s reward (not exceeding
1,000,000)
- Convenience of the employer rule
- Proceeds of life insurance
- Return of premiums
- Gifts, Bequest, and Devises (pure liberality)
NOT Subject to Fringe Benefit Tax
- De minimis
*13th Month Pay, bonus, incentives
*Monetized unused Vacation leave (private
employees less than 10 days)
*Monetized value vacation and sick leave
(government employees)
*Medical cash allowance (not exceeding
1,500)
*Rice subsidy (not exceeding 2,000)
*Uniforms and clothing allowance (6,000)
*Actual medical assistance (not exceeding
10,000)
*Laundry allowance (not exceeding 300 per
month)
*Employees’ achievement awards (not
exceeding 10,000)
*Gifts (not exceeding 5,000)
*Benefits by virtue of a CBA (not exceeding
10,000)
- Housing Benefits (military officials, inside or
within maximum of 50 meters, employees
stay for 3 months or less than)
- Aircraft including helicopters treated as
business use.
- Expenses with receipt in the name of the
employer (it is not a personal expense of the
employee)
- RATA (fixed amounts and received by the
employee as part of their compensation)
- Foreign travel expenses (with proof)
*reasonable business expenses
*Inland travel expenses except lodging cost
in hotel amounting to $300 or less per day
*Economy or business plane ticket
*70% of first-class ticket
- Scholarship grant (with requirements)
*the education involved is directly connected
with the employer’s business.
*Written contract that the employee is under
obligation to remain in the employ of the
employer.
*Educational assistance was provided
through a competitive scheme.
- Insurance Premiums
*Contributions of the employer in SSS,
GSIS for the benefit of the employee
*Cost of premiums in the group assistance
of the employees (borne by the employer)
- Compensation for personal injuries and
sickness
- Income of any kind exempt under treaty
obligation
- Retirement Benefits (all requirements are
present)
- Leave or terminal leaves credit given to
retiring government official (money value)
- Separation pay
- SSS, retirement gratuities, pensions from
foreign agencies (received by resident/non-
resident citizen or alien)
- Payments or benefits administered by the
USVA
- SSS, GSIS, Medicare and other benefits
- Income derived by foreign government
- Income derived from public utility and
political subdivisions
- Prizes and Awards (meet the requirements)
- Prizes and Awards of athletes
- Gains from sale (with maturity value of more
than 5 years)
- Redemption of shares in mutual fund
- Minimum Wage Earner
*Daily meal allowance for overtime work and
night/graveyard shift (not exceeding 25%)
 Passive Income Resident or Citizen NRA ETB
- Interest from any currency bank deposit 20% 20%
- Yield or any other monetary benefit from 20% 20%
deposit substitutes and from trust funds and
similar agreements
- Royalties 20% 20%
- Royalties on books, other literary works and 10% 10%
musical composition
- Prizes (exempt prizes amounting to 10,000 or 20% 20%
less shall be subject to regular tax)
Winnings 20% 20%
Philippine Charity Sweepstakes winnings and Not Taxable Not Taxable
Lotto winnings in the Philippines amounting to
10,000 or less
- Philippine Charity Sweepstakes winning and Taxable Not Taxable
Lotto winnings in the Philippines amounting to
more than 10,000
Interest Income received from depository bank 15% Not Taxable
under Expanded Foreign Currency Deposit
System (OCW, OFW- exempt)
Cash and/or property dividends actually or 10% 20%
constructively received from any of the following:
a. domestic corporation
b. joint stock company
c. insurance or mutual fund companies
d. regional operating headquarters of
multinational companies
e. On the share of an individual partner in the
distribution net income after tax of a partnership
(exempt general professional partnership)
f. On the share of an individual in the net income
after tax of an association, a joint account or a
joint venture or consortium of which he is a
member or a co-venturer.
- Income within on interest on long-term deposit Exempt Exempt
or investment in bank with a maturity of five
years or more
- Four years to less than five years 5% 5%
- Three years to less than four years 12% 12%
- Less than 3 years 20% 20%