(bolding mine)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)
It seems that even if the employer pays no subsidy, but if they are willing to allow the employee to "salary sacrifice" the rent (e.g. report a lower salary, but pay the rent direct and declare both) then it can save significant rent. But is that kind of tax minimisation legal?