The benefits given in excess of the maximum amount allowed as “de minimis” benefits shall be included as part of “other benefits” which is subject to the P90.000.00 ceiling. Any amount in excess of the P90,000 sha11 be subject to income tax, and consequently, to the withholding tax on compensation.
Example: Ms. A received annual clothing allowance amounting to P10.000. Her 13 month pay is P80,000. No other benefits were received for the entire year. In this case, since the prescribed maximum amount for clothing allowance is only P6,000 the excess amount of P4,000 shall be added to the 13th month pay, thereby the entire benefits received amounted to P84,000. In this scenario, the same shall still be exempt from income tax since the ceiling amount for these other benifits is P90,000.
when they are checking whether your business is complying with its Tax obligations,