De Minimis Rule

Meaning & Definition

The De Minimis Rule is a principle where small and insignificant benefits, amounts or deviations are not treated for tax, payroll or compliance purposes, as the costs of tracking them would be unreasonable to maintain. In human resources and payroll, it is used to ease the administration of payroll by eliminating the reporting of minor values in detail.

Important aspects of the De Minimis Rule

• Minimization of administrative complexity and payroll effects. 
• Help HR avoid tracking small remaining benefits.  
• Facilitates the administration of taxes and compliance.  
• Improvement in efficiencies regarding payroll administration.  
• Assists in practical and cost-effective HR operations. 

Statutory & Policy Alignment 

Labour laws in India don’t come with a formal “de minimis rule.” Even so, similar principles apply through the Income Tax Act of 1961, where small-value benefits have specified limits and rules that may provide them tax-exempt or otherwise disregarded.