Looking to hire in Philippines

For recurring communication and workspace costs such as phone, internet, and coworking, a BIR invoice is required. The invoice must show the date, amount, the service provider or merchant name, a description of the service, and for costs incurred in the Philippines, the employer’s name and address. When these conditions are met, reimbursements are Non taxable.

Equipment and office supplies are generally reimbursed on a Non taxable basis when supported by a proper tax invoice or receipt. For items like laptops and software subscriptions, a BIR invoice is required and, if the cost is incurred in the Philippines, it must include the employer’s name and address. Other office equipment, supplies, and postal charges can be supported by a tax invoice or receipt that clearly shows the date, amount, merchant, and description of the purchase.

Business travel expenses are Non taxable when backed by the correct documentation. Many travel costs incurred in the Philippines, such as visa fees, accommodation, flights, train tickets, and car rentals, require a BIR invoice that includes the employer’s name and address. Other items like business travel insurance, taxis or rideshares, fuel, and parking or toll fees can be supported by a tax invoice or receipt that shows the date, amount, merchant, and description, and in some cases the employee’s name.

Everyday meal costs and client entertainment can be reimbursed on a Non taxable basis when they are business-related and supported by a tax invoice or receipt. The documentation must show the date, amount, and the restaurant or merchant name, and for groceries it should also describe what was purchased.

A range of other business-related costs can be reimbursed tax-free when properly documented. Training, courses, books, and promotional items often require a tax invoice or receipt, and if incurred in the Philippines, the document may need to show the employer’s name and address. Medical insurance and medical costs are Non taxable only up to specific annual caps; beyond PHP 90000 per year for medical insurance and PHP 12000 per year for medical costs, any excess is treated as a taxable allowance.

Employers in the Philippines may provide per diems to cover incidental expenses during business travel, in addition to reimbursing direct travel costs. These per diems are subject to daily limits by type.

De minimis benefits are small routine benefits or one-off awards that are tax-exempt up to specific limits set by the Bureau of Internal Revenue. In addition, employees can receive up to PHP 90000 per year in bonuses, 13th month salary, commissions, and other incentive compensation on a tax-exempt basis. If a de minimis benefit exceeds its cap, the excess counts toward this PHP 90000 annual threshold, and once that threshold is fully used, any further excess is taxable compensation. From January 6, 2026, new regulations increase several of these de minimis limits compared with the previous caps.

Bonuses in the Philippines include contractual and discretionary payments such as incentives, commissions, allowances, and 13th month salary. These payments are treated as a benefit and are not taxable up to a combined annual limit of PHP 90000; any amount above this combined limit is subject to income tax and withholding tax.