FRINGE BENEFIT

1. FRINGE BENEFIT

2. 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)

3. 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 dependents 10) life or health insurance & other non-life insurance premiums or similar amounts in excess of what the law allows.

4. 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) Effective 1/1/98 34% 1/1/99 33% 1/1/00 32% 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 areonly for corporate officers/management. For rank and file, it is called an allowance. Allowances (benefits to rank and file) are not subject to FBT.

5. 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

6. 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

7. d) Uniform and clothing allowance not exceeding P5,000 per year e) Actual yearly medical benefits not exceeding P10,000 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

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

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