Philippine Labor Law Glossary
Definition: Per diem is Latin for “per day.” It describes a fixed daily amount given to an employee, usually to cover expenses on assignment. It is a payroll label rather than a defined category in Philippine labor law.
Sa Filipino · Filipino Explanation
Ano ang per diem?
Ang per diem ay Latin para sa “kada araw.” Ito ay takdang halagang ibinibigay araw-araw sa empleyado, kadalasan para pantustos sa gastos habang nasa assignment.
Walang tiyak na tuntunin ang Labor Code tungkol sa “per diem.” Ang mahalaga ay kung ito ba ay panumbas sa gastos o bahagi na ng bayad sa trabaho — dito nakasalalay kung ito ay bahagi ng sahod.
What Per Diem Means
In ordinary Philippine payroll use, a per diem is a fixed daily sum an employer gives a worker who is away from the usual workplace — for meals, local transport and incidentals on a field assignment, a provincial deployment or a training day.
The Labor Code does not define “per diem,” and there is no per diem rule to look up. That is not an oversight in this entry; it is the situation. The label carries no legal consequence by itself. What decides how a per diem is treated is a different question entirely: is this payment reimbursing an expense, or is it paying for work?
The Question That Actually Governs
The Labor Code defines wage broadly as “the remuneration or earnings, however designated, capable of being expressed in terms of money… and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee.”[1]
Note the phrase however designated. Calling something a per diem does not put it outside the definition, and calling something a wage does not put it inside. The substance governs.
Facilities Versus Supplements
The Supreme Court’s working distinction is between facilities and supplements, and it turns on who the benefit is really for.
“Supplements… constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages.” “Facilities… are items of expense necessary for the laborer’s and his family’s existence and subsistence so that… they form part of the wage and when furnished by the employer are deductible therefrom.”[2]
The modern test is stated more simply: “If it is primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s advantage, then it is a supplement.”[3]
A per diem that genuinely reimburses the cost of being sent somewhere is closer to an employer-side expense. A fixed daily amount paid regardless of whether any expense is incurred looks more like compensation wearing a different name.
Regularity Alone Does Not Settle It
A common shortcut is that anything received every month must be part of salary. The Supreme Court has rejected that reasoning: “The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering.”[4]
In that case transportation, staff and housing allowances were held not to form part of salary for computing separation pay, because they were contingent on circumstances rather than unconditionally received. See allowance for the wider treatment, and basic salary for what enters the computation base.
A Per Diem Is Not a De Minimis Benefit
Worth stating plainly, because the two get conflated in payroll practice.
“Per diem” does not appear in the Bureau of Internal Revenue’s enumeration of de minimis benefits. What the list does include is a daily meal allowance for overtime work and night or graveyard shift, capped at a percentage of the regional basic minimum wage. That is a narrower item with its own ceiling, and the current figures are set out on the de minimis benefits entry.
Describing a general travel per diem as a de minimis benefit, and treating it as automatically tax-exempt on that basis, does not follow from the BIR list.
Practical Example
Hypothetical example: A technician is sent to a provincial site for two weeks and receives a fixed daily amount described as a per diem. She spends less than the amount on some days and keeps the difference. Her contract does not require receipts.
The issue is whether that payment reimburses assignment costs or supplements her earnings. The absence of any liquidation requirement, and the fact that she keeps the unspent balance, both point toward compensation rather than reimbursement. The important missing fact is what the arrangement requires and how it has actually been administered — not what the payslip line is called.
Common Misunderstanding
Misunderstanding: “It is called a per diem, so it is not part of wages.”
Correct approach: The Labor Code defines wage “however designated.” The label is not decisive; the nature and purpose of the payment are.
Misunderstanding: “Per diems are de minimis benefits and therefore tax-exempt.”
Correct approach: Per diem is not on the BIR de minimis list. The listed item is a daily meal allowance for overtime or night-shift work, with its own ceiling.
Related and Contrasting Terms
Broader term: Allowance
Related terms:
Do not confuse with:
- De Minimis Benefits — a defined BIR list with specific ceilings, which does not include per diem
Related LaborCode.ph Guides
Sources and Legal Citations
- Labor Code of the Philippines, Article 97(f), LawPhil Project. Supports: the definition of wage, including the words “however designated.”
- States Marine Corporation and Royal Line, Inc. v. Cebu Seamen’s Association, Inc., G.R. No. L-12444, 28 February 1963, LawPhil Project. Supports: the distinction between facilities and supplements.
- Our Haus Realty Development Corporation v. Parian, G.R. No. 204651, 6 August 2014, LawPhil Project. Supports: the purpose test for distinguishing a facility from a supplement.
- Millares v. National Labor Relations Commission, G.R. No. 122827, 29 March 1999, LawPhil Project. Supports: monthly receipt does not by itself make an allowance part of salary.
Research note: a search of the Supreme Court E-Library and the LawPhil Project did not locate a decision squarely deciding whether a private-sector per diem forms part of wage or salary for computing separation pay, retirement pay or thirteenth-month pay. The principles above are the general wage and allowance rules that would govern the question, not a per diem holding. Government per diem rules under Commission on Audit and Department of Budget and Management issuances are a separate framework and do not apply to private employment.
Sources rechecked as of: 9 September 2026
Disclaimer
This glossary entry is for general educational and legal-information purposes and is not legal advice. Labor disputes depend on specific facts and current law. LaborCode.ph is independent and is not a government website, tribunal or law firm.