Deducting value of facilities from worker's wage

The Secretary of Labor may from time to time fix in appropriate issuances the fair and reasonable value of board, lodging, and other facilities customarily furnished by an employer to his employees both in agricultural and non-agricultural enterprises.

The fair and reasonable value of facilities is hereby determined to be the cost of operation and maintenance, including adequate depreciation plus reasonable allowance (but not more than 5 1/2% interest on the depreciated amount of capital invested by the employer); provided that if the total so computed is more than the fair rental value (or the fair price of the commodities or facilities offered for sale) the fair rental value shall be the reasonable cost of the operation and maintenance. The rate of depreciation and depreciated amount computed by the employer shall be those arrived at under good accounting practices.

The term “good accounting practices” shall not include accounting practices which have been rejected by the Bureau of Internal Revenue for income tax purposes. The term “depreciations” shall include obsolescence. ("Value of facilities." Implementing Rules of the Labor Code of the Philippines, Rule VII-A: WAGES, Memorandum Circular No. 2, November 4, 1992)