COMPUTATION OF FRINGE BENEFITS TAX
Fringe Benefit Defined. —means 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 as defined herein) such
as, but not limited to, the
following:
(1) Housing; (refer to next page for a more detailed discussion)
(2) Expense account;
(3) Vehicle; (refer to next page for a more detailed discussion)
(4) Household personnel, such as maid, driver and others;
(5) Interest on loan at less than market rate to the extent
of the difference between the market rate and actual rate
granted;
(6) Membership fees, dues and other expenses borne by
the employer for the employee in social and athletic clubs
or other similar organizations;
(7) Expenses for foreign travel;
(8) Holiday and vacation expenses;
(9) Educational assistance to the employee or his
dependents; and
(10) Life or health insurance and other non-life insurance
premiums or similar amounts in excess of what the law
allows
Guidelines in the determination of Monetary Value:
Fringe Benefit Granted
Valuation
(Categorize the 10 FBT above into:)
Fringe Benefits Not Taxable. — The following
fringe benefits are not taxable under this
Section:
(1) Fringe benefits which are authorized and
exempted from tax under special laws;
(2) Contributions of the employer for the
benefit of the employee to retirement,
insurance and hospitalization benefit plans;
(3) Benefits given to the rank and file
employees, whether granted under a
collective bargaining agreement or not; and
(4) De minimis benefits as defined in the
rules and regulations to be promulgated by
the Secretary of Finance, upon
recommendation of the Commissioner
BAR FAVOURITE: IF THE BENEFIT WAS
FURNISHED BY THE EMPLOYER FOR HIS
CONVENIENCE OR ADVANTAGE, NOT
CONSIDERED AS FRINGE BENEFITS,
THEREFORE NOT TAXABLE.
(1) Money or directly paid by
employer
Amount granted / paid
for
(2) Property (ownership is
transferred)
(3) Property (ownership NOT
transferred)
FMV or ZV of the
property
Depreciation Value
Grossed-Up Monetary
Value (GUMV) [STEP 2]
FBT
[STEP 3]
100%
Monetary Value
Divide by
Grossed-up Monetary Value
Multiply by
Fringe Benefits Tax
153,846.15 – EXPENSE OF EMPLOYER
(100,000/65%)
35%
xxx
65%
xxx
35%
xxx
53,846.15
(153,846.15 X 35%)
MONETARY VALUE
65%
100,000.00 - FRINGE BENEFITS
[STEP 1]
RECEIVED BY M/S EMPLOYEE
NOTE: IF NRA-NETB – DIVISOR IS 75% AND FBT IS 25%
1
HOUSING
SCENARIOS
1
TRANSFERRED; WITH SHARE
FROM S/M EMPLOYEE
2
NOT TRANSFERRED; RENTED BY
EMPLOYER; LENT TO S/M
EMPLOYEE
3
NOT TRANSFERRED; OWNED BY
EMPLOYER; LENT TO S/M
EMPLOYEE
4
NOT TRANSFERRED; NEWLY
OWNED BY EMPLOYER; LENT TO
S/M EMPLOYEE
MONETARY VALUE IS
FMV LESS SHARE
VEHICLE
SCENARIOS
1
TRANSFERRED; WITH SHARE
FROM S/M EMPLOYEE
2
TRANSFERRED; BOUGHT ON
INSTALLMENT
MONETARY VALUE
FMV LESS SHARE
DEPRECIATION VALUE =
RENTAL VALUE X 50%
DEPRECIATION VALUE =
VALUE OF PROPERTY X 5% X
50%
DEPRECIATION VALUE = VALUE
OF PROPERTY (ACQUISITION
COST EXCL OF INTEREST) X 5%
X 50%
FMV DIVIDED BY “5”
1M / 5 = 200,000 PER YEAR
*5 IS THE LIMIT
3
4
NOT TRANSFERRED; OWNED BY
EMPLOYER; LENT TO S/M
EMPLOYEE
NOT TRANSFERRED; RENTED BY
EMPLOYER; LENT TO S/M
EMPLOYEE
2
DEPRECIATION VALUE =
AMOUNT OF PROPERTY / 5
DEPRECIATION VALUE =
AMOUNT OF LEASE / 5