Author MRTC

Introduction

REVENUE MEMORANDUM CURCULAR NO. 105-2025

SALIENT POINTS
Background and PurposeThis RMC clarifies the taxability of HEA granted to Health Care Workers under RA No. 11712, otherwise known as the “Public Health Emergency Benefits and Allowances for Health Care Workers Act”.
CoveragePursuant to Section 5 of RA No. 11712, all health care and non-health care workers are entitled to HEA for each month of service rendered during COVID-19 or any declared public health emergency, based on their level of risk exposure, regardless of employment status, until the emergency is lifted by the President.
Amount of EntitlementThe minimum amount to be granted to health care and non-health care workers shall be determined based on the following criteria:   Area of Deployment Amount of HEA Low Risk Areas At least Three thousand pesos (₱3,000.00) Medium Risk Areas At least Six thousand pesos (₱6,000.00) High Risk Areas At least Nine thousand pesos (₱9,000.00)
Timing of HEA ReleaseHEA shall be released monthly, in addition to existing benefits received by covered health and non-health care workers.
Taxability of HEAHEA shall be is classified as part of “other benefits” under Section 32 (B) (7) (e) of the National Internal Revenue Code, as amended, which provides that gross benefits received by officials and employees of public and private entities, not exceeding Ninety Thousand Pesos (₱90,000.00), are exempt from income tax.   Accordingly, HEA granted to covered workers under an employer-employee relationship may be excluded from gross income and is not subject to income tax, provided it does not exceed the ₱90,000.00 threshold.   For individuals engaged under a contract of service or job order, or those without an employer-employee relationship with the hiring agency, health and non-health care workers are considered self-employed or independent contractors. In such cases, HEA is subject to income tax and other applicable taxes in accordance with the Tax Code.
Administrative RequirementCovered individuals receiving the HEA shall be included in the annual Alphabetical List of Employees/Payees submitted by employers or payors.