What is the expense reimbursement policy in the Philippines?

Modified on: Mon, 25 Aug, 2025 at 3:19 PM

TABLE OF CONTENTS

Invoicing and Documentation
Reimbursement and Taxability
Travel and Mileage

This article outlines the policies and procedures for travel, mileage, invoicing, and reimbursement of business expenses for employees based in the Philippines.

Invoicing and Documentation

Receipts should be named under the company:
New Horizons Global Partners Philippines Inc.
TIN: 604-227-760-000
For goods, a Sales Invoice is required; for services, a Service Invoice.
Invoices are required and should list New Horizons Global Partners Philippines Inc.
Exceptions may apply for small transport expenses (e.g., jeepney or tricycle rides) where receipts are not issued.
Avoid using services that do not issue receipts unless the amount is minimal.

Reimbursement and Taxability

Tax-Free reimbursements

Any expense supported by a proper receipt (Sales or Service Invoice) and named under the company is not taxable to the employee. These are treated as deductions from company income.

Per Diem rates for 2025

There is no fixed per diem table, but you may refer to RR 2-98 for guidance.

Entertainment and Gifts

There’s no specific rule, but Meals and Entertainment combined with Miscellaneous/General Admin Expenses should not exceed 1% of the company’s total income for the year.

Health and Wellness

Medical Assistance is allowed as a De Minimis benefit, up to ₱10,000 per annum. Refer to RMC 107-2024 for details.

VAT

If the receipt is local, properly documented, and named under the company, the VAT is claimable as input VAT.

To support VAT claims, it’s helpful to summarize invoice details in a shared document (e.g., Google Sheet) with the following fields:

Date
Supplier Name
TIN
Gross Purchase Amount
VAT Amount
Invoice/Reference No.
Shortened Address

Travel and Mileage

Mileage rate per KM

In the Philippines, mileage is not reimbursed per kilometer. Instead, employees must submit actual receipts or proof of payment for transportation. This is because per-kilometer charges vary depending on the type of vehicle used.

Parking and Toll

Parking tickets and tolls should be reported as separate transportation expenses with corresponding receipts. These are categorized under Transportation and Travelling Expenses for bookkeeping purposes.

Business Travel Restrictions

There are no specific restrictions or caps, as long as the travel is reasonable and necessary for the employee to perform their duties.

Transport service Rules

There are no strict rules, but it is encouraged to use transport services that issue receipts. This helps ensure proper documentation for reimbursement.

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Philippines