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Rent paid directly by Employer to Landlord

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Rent paid directly by Employer to Landlord

Postby charlie7430 » Mon, 28 Sep 2009 1:12 pm

Still early days in reviewing full package, however - employer paying rent directly to landlord; what and more importantly how does this become a benefit to me? I have reviewed IRAS site etc, and have not yet found any specific examples to demonstrate tax implicatios/benefits.

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Strong Eagle
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Postby Strong Eagle » Mon, 28 Sep 2009 1:23 pm

It's a taxable benefit.

Accommodation provided to employee

Q1 What is the taxable value when accommodation is provided to an employee?

The taxable value is:

(1) The lower of:

* 10% of employment income, or
* the annual value of the premises

(2) Less rent paid by employee (if any)


An employee was paid salary of $40,000, bonus of $4,000 and allowance of $5,000 in a calendar year. He was also provided with an unfurnished accommodation with an annual value of $35,000, but has paid a total rent of $1,000 in the year.

The taxable value is computed as follows:

(1) The lower of:

* 10% x ($40,000 + $4,000 + $5,000) = $4,900, or
* Annual value of $35,000

(2) Less rent paid of $1,000

In this case, the taxable benefit is $3,900 (i.e. $4,900 - $1,000).

See ... 8#employee for details.

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Postby SingLife » Wed, 23 Mar 2011 1:04 pm

So it will be coming in benefit-in-kind?

I agree IRAS website is not much clear on this.

the employee will have to pay 10% of his salary+bonus etc. annum as tax to IRAS as benefit-in-kind as employer is paying for his house rent. Right? (annual value of premises negated as in most cases it will be much higher).

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Postby sundaymorningstaple » Wed, 23 Mar 2011 1:31 pm

What's not clear about it? I find it is extremely straight forward. In fact, the IRAS tax laws are about the clearest tax laws you can find anywhere.

But for you, yes, it's benefits in kind. But frankly, does it matter what they call it? the computation instructions on how it's computed are very clear.

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