Guide to Global Payroll Management Nontaxable fringe benefits include the following: * payment for unused vacation leave credits of private employees not exceeding ten days during the year; * medical cash allowance to dependents of employees, not exceeding PHP 125.00 per month; * rice subsidy up to a certain amount; * uniform/clothing allowance not exceeding PHP 5,000.00 per year; * medical assistance not exceeding PHP 10,000.00 per year; * laundry allowance not exceeding PHP 300.00 per month; * employee achievement awards, with an annual monetary value not exceeding PHP 10,000.00 received by the employee under a written plan that does not discriminate in favor of highly compensated employees; * Christmas and holiday gifts not exceeding PHP 5,000.00 per employee per year; * daily meal allowance for overtime work and night shift work not exceeding 25% of the basic minimum wage; * benefits received under a collective bargaining agreement; and * productivity incentives up to PHP 10,000.00. Tax rates Income taxes. Employment income of residents is taxed at graduated rates ranging from 0% to 35%. Nonresident aliens are taxed according to whether they are engaged in a trade or business in the country. C-48 * A nonresident alien staying in the country for more than a total of 180 days in a calendar year is considered to be doing business in the Philippines; otherwise, the nonresident is not considered to be engaged in a trade or business in the country. Nonresident aliens who are deemed to be engaged in a trade or business are generally taxed the same as residents on Philippine-source income. * Nonresident aliens not engaged in a trade or business in the country are subject to final withholding tax of 25% on gross Philippine-source income. * Nonresident aliens employed by regional or area headquarters of multinational firms or offshore banking units in the Philippines are subject to a 15% final tax on gross compensation income. * Aliens who are permanent residents of a foreign country but employed and assigned to the Philippines by service contractors or subcontractors involved in petroleum operations there are subject to a 15% final tax on gross compensation received from such contractors or subcontractors.