At a glance - Tax treatment of awards
Nature
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Taxable/ Not taxable
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| 1 |
Award for passing internal/ external examination (cash/ non-cash) |
This award is not taxable if the value of the benefit does not exceed $200. If the award exceeds the exemption threshold of $200, the whole value is taxable.
Prior to Year of Assessment (YA) 2008, the award was taxable.
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| 2 |
Bursary |
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a) The scheme is open to all employees with the purpose of providing financial assistance to needy employees and awards are only given to eligible employees who satisfy certain criteria, e.g. income of family members. |
Not taxable |
b) Reward for services rendered by a specific employee |
Taxable |
| 3 |
Innovation/ Improvement |
Not taxable due to administrative concession |
| 4 |
Long Service/ Retirement |
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a) Cash awards/ gift vouchers |
Taxable |
b) Non-cash awards |
Not taxable if it does not exceed $200. If the award exceeds the exemption threshold, the whole value is taxable.
Prior to YA 2008, the exemption threshold was $100.
See more information
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| 5 |
Award for Service Excellence in recognition of good service provided (cash/ non-cash)e.g. GEMS award, Most Courteous Employee Award
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This award is not taxable if the value of the benefit does not exceed $200. If the award exceeds the exemption threshold, the whole value is taxable.
Prior to YA 2008, the award was taxable.
See more information
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| 6 |
Recognition of work performance (cash/ non-cash)
e.g. awards given to promote corporate culture and organising company events and attaining goals/ targets |
Taxable |
| 7 |
Payment for successfully referring friends or relatives to work for the company. |
Taxable even if the award is also available to non-employees |
| 8 |
Zero/low Medical Leave (cash/ non-cash) |
This award is not taxable if the value of the benefit does not exceed $200. If the award exceeds the exemption threshold, the whole value is taxable.
Prior to YA 2008, this award was taxable.
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Long service/ retirement (non-cash)
Q1 Are non-cash awards taxable?
They are taxable as they are granted in respect of employment.
Non-cash awards that do not exceed $100 are considered to be not substantial in value and are not taxable due to an administrative concession granted.
With effect from YA 2008, the exemption threshold has been increased from $100 to $200. If the award exceeds the exemption threshold, the whole value is taxable.
Declare the cost incurred by the employer if the award is taxable.
Q2 If the company engraves its logo on the award, e.g. a watch or a pen, is it still taxable?
The award is taxable if it exceeds $100 (substantial in value).
With effect from YA 2008, the exemption threshold has been increased from $100 to $200. If the award exceeds the exemption threshold, the whole value is taxable.
Declare the cost incurred by the employer if the award is taxable.
Recognition of good service (service excellence)
Q How is the exemption threshold applied?
There can be different types of awards given for good service. The exemption is applied on a per award category basis.
Example 1
An employee received a Most Courteous Employee Award of $150 and a Most Compliments Award of $200 in a year. Since both awards do not exceed $200 each, there is no taxable benefit.
Example 2
An employee received the Most Courteous Employee Award of $150 twice in the year. Since he received a total of $300 under this category, exceeding the threshold of $200, the benefit of $300 is taxable.
Example 3
An employee received a Most Compliments Award of $200 and a Long Service non-cash award of $150. Since both awards do not exceed $200 each, there is no taxable benefit.