Basis of Computing Accommodation Benefits
Accommodation and related benefits, including hotel accommodation provided to employees during their employment in Singapore, are considered part of their employment income and are taxable.
IRAS determines the taxable value of accommodation benefits based on the following:
- Annual value (AV) of the property or market rent of the property
- Level of furniture and fittings, i.e. fully furnished or partially furnished
- Number of days accommodation is provided by the employer
- Number of employees living / sharing the accommodation
- Rent paid by employee (if any)
- Type of accommodation (e.g. apartment or hotel)
Taxable Value of Accommodation Benefits From YA 2020
| Type of Accommodation Benefit | How It Is Taxed |
|---|---|
Residence or Serviced Apartment not within Hotel Building | If the property is rented by the employer, it is the total annual rent (including the rent for furniture and fittings) paid by the employer less total annual rent paid by employee. Otherwise, the taxable value of accommodation benefit is the AV of the property less total annual rent paid by employee. See: Examples 1 to 3 |
Furniture and Fittings in Residence or Serviced Apartment | If the property is rented by the employer, the rent for furniture and fittings should be included in the total annual rent paid by the employer. Otherwise, furniture and fittings in a residence or serviced apartment are valued as:
Partially furnished - Only fittings (e.g. lighting, air- conditioners/ceiling fans, water-heater) are provided. Fully furnished - Both fittings and furniture / household appliances are provided. |
Utilities and Housekeeping Costs in Residence or Serviced Apartment | Utilities, telephone and cable bills will be taxed based on the actual amount paid by the employer. Gardening/Upkeep of compound and housekeeping costs will be taxed based on actual wages paid by employer to the gardener and domestic helper. |
Hotel Accommodation or Serviced Apartment within Hotel Building | The actual costs incurred by the employer for the hotel stay less the amount paid by employee. See: Example 4 |
Housing Allowance | Housing allowance is taxed in full. Where the employee signs a rental agreement but the employer pays the rent to the landlord, the actual rental amount paid by the employer will be taxed in full. The rental agreement between the employee and the landlord will not affect the tax treatment. |
Examples
Example 1: Employee Provided with Fully Furnished Accommodation
An employee was provided with fully furnished accommodation (i.e. a residential apartment) with an AV of $30,000 from 1 Jan to 31 Dec. The total rent (inclusive of rent for furniture and fittings) paid by the employer in the year was $50,000. The total rent paid by the employee in the year was $6,000.
The taxable value for accommodation as well as furniture and fittings are computed as follows:
| From YA 2020 | |
|---|---|
| Total Rent (Inclusive of Rent for Furniture and Fittings) Paid by Employer | $50,000 |
| Less: Rent Paid by Employee | $6,000 |
| Taxable Value of Accommodation Benefit | = $44,000 (i.e. $50,000 - $6,000) |
Example 3: Fully Furnished Accommodation is Provided by Employer for Less than a Year
| Employment Period | 365 days |
| Accommodation Provided for | 90 days |
| Annual Value of Property | $40,000 |
| Total Rent (Inclusive of Rent for Furniture and Fittings) Paid by Employer | $15,000 |
| Utilities Bill | $250 |
| Rent Paid by Employee | $2,000 |
| Number of Employees Sharing the Premises | 1 |
The taxable value for accommodation as well as furniture and fittings are computed as follows:
| From YA 2020 | |
|---|---|
| Total Rent (Inclusive of Rent for Furniture and Fittings) Paid by Employer | $15,000 |
| Less: Rent Paid by Employee | $2,000 |
| Taxable Value of Accommodation Benefit | = $13,000 ($15,000 - $2,000); |
Note: The actual utilities bills of $250 is to be reported separately.
Example 4: Hotel Accommodation Provided to Employee
An employer provided hotel accommodation to one of its employees, his wife and child aged 5 years from 1 Jan to 31 Jan.
The total actual costs incurred by the employer for the hotel stay was $6,200 and the employee paid $500 to the employer.
| From YA 2015 | |
|---|---|
Total Cost of Hotel Stay Paid by Employer | $6,200 |
Cost of Hotel Stay Paid by Employee | $500 |
Taxable Value of Hotel Accommodation Benefit | =$5,700 ($6,200 - $500) |
The taxable value is the actual costs incurred by the employer less amount paid by employee. The taxable value of hotel accommodation is $5,700 ($6,200 - $500).
FAQs
Where can I get information on the AV of the property?
The AV is the estimated annual rent of the property if it is rented out, excluding the furniture, furnishings and maintenance fees. The annual value of a property can be found on the property tax bill or via IRAS' e-Valuation List service.
While IRAS usually reviews the AV yearly, if there is an adjustment of AV during the year, you have to take into account of the changes in determining the AV for the purpose of computing the taxable value of accommodation.
How are the 40% and 50% arrived at as the basis of computing the value of furnishing for the partially furnished and fully furnished property?
The percentages are determined based on inputs gathered from a survey conducted for key industry players on the provision of furniture and fittings.
The landlord has provided lighting fixtures but not an air-conditioner or fan. Is this unit considered unfurnished or partially furnished?
A partially furnished unit is defined as one that is provided with fittings such as lightings, water-heater, air-conditioner and/or ceiling fan. A unit that is fitted with any of these or similar items will be considered as partially furnished. Therefore, the value of furniture and fittings of this unit is to be determined based on 40% of AV of the unit.
Can employers use the actual rent paid instead of AV of the property to report the accommodation benefits?
Reporting actual rent
If employers use the actual rent paid for furnished units, they are to report the full rent for the property (including furniture and fittings).
Example 1: Actual rent and amount of furniture and fittings are provided
Where a tenancy agreement stipulates that the monthly rental is $3,000 for the property and $1,600 for the furniture and fittings, the amount to be reported as actual rent paid by employer would be $4,600. If the period of occupation is 10 months, the total amount of rent paid to be reported would be $46,000 (i.e. $4,600 x 10). The taxable value for the accommodation benefit is $46,000.
Example 2: Only monthly rental amount is provided
Where the monthly rental is $5,000 and there is no breakdown of the rental paid for the property and furniture and fittings, the amount to be reported as actual rent paid by employer would be $5,000. If the period of occupation is 12 months, the total amount of rent paid to be reported would be $60,000 (i.e. $5,000 x 12). The taxable value of the accommodation benefit is $60,000.
Example 3: Additional cost for rental of furniture and fittings
Where the monthly rental is $5,000 and the landlord provides some furniture and fittings at the property and the employer incurs a monthly rental of $500 for leasing additional furniture and fittings for the unit, the amount to be reported as actual rent paid by employer would be $5,500. This is regardless of whether the rental of the additional furniture and fittings is paid by the employer directly or by the employee but reimbursed by the employer. If the period of occupation is 12 months, the taxable value of the accommodation benefit is $5,500 per month and $66,000 (i.e. $5,500 x 12) per year.
For all the three scenarios, employers are not required to report the value of benefit for furniture and fittings separately as the gross rent (or together with the separate leasing of furniture and fittings) is inclusive of the value for the furniture and fittings.