When is it good to use pass by reference in PHP?

The following does not apply to objects, as it has been already stated here. Passing arrays and scalar values by reference will only save you memory if you plan on modifying the passed value, because PHP uses a copy-on-change (aka copy-on-write) policy. For example:

# $array will not be copied, because it is not modified.
function foo($array) {
    echo $array[0];
}

# $array will be copied, because it is modified.
function bar($array) {
    $array[0] += 1;
    echo $array[0] + $array[1];
}

# This is how bar shoudl've been implemented in the first place.
function baz($array) {
    $temp = $array[0] + 1;
    echo $temp + $array[1];
}


# This would also work (passing the array by reference), but has a serious 
#side-effect which you may not want, but $array is not copied here.
function foobar(&$array) {
    $array[0] += 1;
    echo $array[0] + $array[1];
}

To summarize:

• If you are working on a very large array and plan on modifying it inside a function, you actually should use a reference to prevent it from getting copied, which can seriously decrease performance or even exhaust your memory limit.

• If it is avoidable though (that is small arrays or scalar values), I’d always use functional-style approach with no side-effects, because as soon as you pass something by reference, you can never be sure what passed variable may hold after the function call, which sometimes can lead to nasty and hard-to-find bugs.

• IMHO scalar values should never be passed by reference, because the performance impact can not be that big as to justify the loss of transparency in your code.