Christmas Gift Tax Exemption: The ₱6,000 De Minimis Limit (2026)
By Robin Salvador, co-founder, Caffeine Brothers
Last updated: October 18, 2026
Quick answer: In 2026, a Philippine employer can give each employee up to ₱6,000 a year in Christmas and major anniversary gifts without income tax. The ceiling rose from ₱5,000 under BIR Revenue Regulations (RR) No. 29-2025, which took effect on January 6, 2026. Any amount above ₱6,000 is moved into the ₱90,000 yearly exclusion for the 13th month pay and other benefits, and only the total above ₱90,000 is taxed.
Key takeaways
- RR No. 29-2025 was issued on December 22, 2025 and took effect on January 6, 2026. It raised the Christmas and anniversary gift ceiling from ₱5,000 to ₱6,000 per employee per year.
- The same regulation raised nine other de minimis ceilings, including the rice subsidy (₱2,000 to ₱2,500 a month) and employee achievement awards (₱10,000 to ₱12,000 a year).
- Gifts above the ceiling are not taxed immediately. The excess joins the ₱90,000 “other benefits” exclusion set by the TRAIN law (RA 10963).
- Every Caffeine Brothers Christmas gift set costs ₱120 to ₱990 on October 18, 2026, so one set per person stays well inside the ₱6,000 ceiling.
- Bills to raise the ₱90,000 ceiling to ₱120,000 or ₱150,000 were still pending in October 2026.
What is the tax-free limit for Christmas gifts in 2026?
The Bureau of Internal Revenue (BIR) treats some small employee benefits as “de minimis.” These are small benefits listed in the withholding tax regulations. PwC Philippines notes they are exempt from both income tax on compensation and fringe benefit tax, so the employer does not withhold tax on them and they do not appear as taxable pay.
Gifts given during Christmas and major anniversary celebrations are on that list. From January 6, 2026, the ceiling is ₱6,000 per employee per year. The limit is yearly and shared: a ₱4,000 Christmas gift and a ₱2,000 company anniversary gift in the same year use up the whole ₱6,000.
This is general information for planning, not tax advice. Your accountant or the BIR should confirm how your own payroll treats each benefit.
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Shop Drip Bags →What changed under RR 29-2025?
RR No. 29-2025 amends RR No. 2-98, the main regulation on withholding tax, and was issued on December 22, 2025. Grant Thornton Philippines notes that it takes effect 15 days after publication in the Official Gazette or on the BIR website. PwC Philippines gives the effective date as January 6, 2026. It raised every de minimis ceiling, most by about 20%.
| Benefit | Old ceiling | New ceiling (from Jan 6, 2026) |
|---|---|---|
| Monetized unused vacation leave (private employees) | 10 days a year | 12 days a year |
| Medical cash allowance to dependents | ₱1,500 a semester | ₱2,000 a semester |
| Rice subsidy | ₱2,000 a month | ₱2,500 a month, or one 50 kg sack |
| Uniform and clothing allowance | ₱7,000 a year | ₱8,000 a year |
| Actual medical assistance | ₱10,000 a year | ₱12,000 a year |
| Laundry allowance | ₱300 a month | ₱400 a month |
| Employee achievement awards | ₱10,000 a year | ₱12,000 a year |
| Christmas and major anniversary gifts | ₱5,000 a year | ₱6,000 a year |
| Overtime and night shift meal allowance | 25% of the basic minimum wage | 30% of the basic minimum wage |
| CBA and productivity incentives (combined) | ₱10,000 a year | ₱12,000 a year |
For gifts, the change is ₱1,000 per person. For a team of 20, that is ₱20,000 more a year that the company can give in gifts without withholding tax, compared with 2025.
What happens if a gift is worth more than ₱6,000?
The amount above the ceiling is not taxed on its own. It is classified as part of “other benefits.” InCorp Philippines, citing Revenue Memorandum Circular 50-2018, puts it this way: de minimis benefits above the ceiling “shall be classified under other benefits” and are subject to the ₱90,000 statutory ceiling.
That ₱90,000 comes from Section 32(B)(7)(e) of the Tax Code as amended by the TRAIN law (RA 10963). It excludes from gross income the 13th month pay and “other benefits such as productivity incentives and Christmas bonus,” up to a combined ₱90,000 a year. Only the total of those items above ₱90,000 is taxed as regular compensation.
So a ₱7,000 gift has two parts. The first ₱6,000 is de minimis. The other ₱1,000 is added to the employee’s 13th month pay and bonuses. If that total stays at ₱90,000 or less, the employee still pays no tax on any of it.
Note that the Tax Code names the Christmas bonus as part of the ₱90,000 group. A cash bonus and a de minimis gift are listed separately in the rules, so ask your accountant how your company should classify a cash gift.
Worked examples with coffee gift sets
The table uses Caffeine Brothers gift set prices checked on our shop on October 18, 2026. We use the price paid as the value of each gift. The ₱6,000 ceiling is per employee for the whole year.
| Example | Value per employee | Within ₱6,000? | What is left or what moves |
|---|---|---|---|
| One Christmas Coffee Duo set (2 × 200 g) | ₱620 | Yes | ₱5,380 of the ceiling left for the year |
| Christmas Coffee Partners (₱990) at Christmas, plus the same set on the company anniversary | ₱1,980 | Yes | ₱4,020 left |
| A ₱6,000 hamper from another supplier plus The Holiday Coffee Experience (₱840) | ₱6,840 | No | ₱840 moves to the ₱90,000 other benefits group |
| Ten Cups of Christmas drip bag box for 30 staff | ₱240 (₱7,200 total spend) | Yes | ₱5,760 left per person |
Our nine Christmas sets range from ₱120 (5 flavoured drip bags) to ₱990 (two 400 g bags). Even the most expensive set uses one sixth of the yearly ceiling. If you want ideas by budget, see our corporate Christmas gifts guide and the Kris Kringle coffee gifts under ₱500.
Is the ₱90,000 ceiling going up?
Not yet. Two proposals were active in 2026. On July 31, 2026, Politiko reported that House Ways and Means Committee chair Miro Quimbo said the panel would push to raise the tax-exempt ceiling for the 13th month pay and other bonuses from ₱90,000 to ₱120,000. On October 5, 2026, The Manila Times reported that Senate President Win Gatchalian was urging passage of Senate Bill 56, which would raise it to ₱150,000.
Neither proposal had become law in the reports we read on October 18, 2026. Plan this year’s payroll on ₱90,000 and the RR 29-2025 de minimis ceilings.
How should HR plan Christmas gifts this year?
- List every de minimis item each employee already gets in 2026, such as the rice subsidy and uniform allowance, so you know which ceilings are used.
- Add up gifts per person for the year, counting Christmas and any major anniversary gift together against the ₱6,000 ceiling.
- Move any excess into the 13th month computation and check that the 13th month pay, bonuses and excess gifts stay within ₱90,000.
- Keep receipts and the gift list so payroll can show the value of each gift per employee.
- Order early. Our Metro Manila deliveries take 1 to 3 business days and provincial deliveries 3 to 7, and flavoured drip bags are only available until December 23.
Payroll costs go beyond gifts. Our barista salary guide shows how the 13th month pay and mandatory contributions add up for a café team.
Frequently asked questions
How much can an employer give as a tax-free Christmas gift in 2026?
Up to ₱6,000 per employee per year, under Revenue Regulations No. 29-2025, which took effect on January 6, 2026. The limit was ₱5,000 before that. It covers gifts given during Christmas and major anniversary celebrations combined, not each occasion separately.
What happens if the gift is worth more than ₱6,000?
The excess is not taxed right away. It is classified as part of “other benefits,” which share the ₱90,000 yearly exclusion with the 13th month pay and similar bonuses. Only the total of those benefits above ₱90,000 becomes taxable compensation.
Does a Christmas gift count toward the ₱90,000 13th month exclusion?
A gift within the ₱6,000 de minimis ceiling does not. Only the part above ₱6,000 moves into the ₱90,000 “other benefits” group. A Christmas bonus is a different item: the Tax Code names it as one of the other benefits under the ₱90,000 limit.
Has the ₱90,000 ceiling been raised?
Not as of October 18, 2026. A House committee chair said in July 2026 that the panel would push to raise it to ₱120,000, and Senate Bill 56 proposes ₱150,000. Neither had become law in the reports we read.
Sources
- Tax Alert No. 2: Revenue Regulations No. 29-2025. PwC Philippines, January 16, 2026. Used for the old and new de minimis ceilings and the exemption from income tax and fringe benefit tax.
- The rise of de minimis benefit ceilings: Modest but meaningful. PwC Philippines, January 22, 2026. Used for the January 6, 2026 effective date.
- Increasing the ceiling of non-taxable de minimis benefits. Grant Thornton Philippines, January 12, 2026. Used for the December 22, 2025 issue date and the effectivity rule.
- BIR RR No. 29-2025: amended de minimis provisions. Forvis Mazars Philippines, January 6, 2026. Used for the wording of the gift ceiling.
- BIR announces updates to de minimis benefits. InCorp Philippines, February 14, 2025. Used for the treatment of amounts above the ceilings (RMC 50-2018).
- Republic Act No. 10963 (TRAIN law). LawPhil, 2017. Used for Section 32(B)(7)(e) and the ₱90,000 exclusion.
- House panel backs higher tax exemption for 13th month pay, other bonuses. Politiko, July 31, 2026. Used for the ₱120,000 proposal.
- Gatchalian pushes tax relief measure. The Manila Times, October 5, 2026. Used for Senate Bill 56 and the ₱150,000 proposal.
- Christmas coffee gift sets. Caffeine Brothers, prices checked October 18, 2026. Used for the gift set prices.
Cite this article: Caffeine Brothers. “Christmas Gift Tax Exemption: The ₱6,000 De Minimis Limit (2026).” Caffeine Brothers Coffee Blog, October 2026. https://caffeinebrothers.co/christmas-gift-tax-exemption/
You are welcome to reference the charts and frameworks in this article with a link back to this page.
Planning gifts for your team or clients? Browse our Christmas coffee gift sets from ₱120 to ₱990, or contact us with your headcount and delivery date for a corporate quote. Offices that want coffee all year can also ask about wholesale supply.
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