Accommodation and Related Benefits

Accommodation and related benefits, including hotel accommodation provided to employees during their employment in Singapore, are part of employment income and subject to income tax.

Basis of Computing Accommodation Benefits

Accommodation benefits derived from your employment are part of your income.

IRAS determines the taxable value of accommodation benefits based on the following:

  1. Annual value (AV) of the property or market rent of the property
  2. Level of furniture and fittings, i.e. fully furnished or partially furnished
  3. Number of days accommodation is provided by the employer
  4. Number of employees living / sharing the accommodation
  5. Rent paid by employee (if any)
  6. Total employment income of employee (prior to YA 2015)
  7. Type of accommodation (e.g. apartment or hotel)

Taxable Value of Accommodation Benefits From YA 2015

Type of Accommodation BenefitHow It Is Taxed

Residence or Serviced Apartment not within Hotel Building

It is the AV of the property less total annual rent paid by employee.

Where AV is not available, take the market rent paid by the employer (including the rent paid for the furniture and fittings) minus the rent paid by employee.

See: Example 1

 

Furniture and Fittings in Residence or Serviced Apartment

Furniture and fittings in a residence or serviced apartment are valued as:

  • 40% of the AV if the property is partially furnished; or
  • 50% of the AV if the property is fully furnished.

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.

See: Example 2

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 5

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.

Taxable Value of Accommodation Benefits Before YA 2015

Type of Accommodation BenefitHow It Is Taxed

Residence or Serviced Apartment not within Hotel Building

The lower amount of:

  • 10% of employment income; or
  • AV of property,

Less: Rent paid by employee

See: Example 1

Furniture and Fittings in Residence or Serviced Apartment

Prescribed rates for each piece of furniture & fittings provided

See:Value of the Furniture and Fittings and Related Benefits

Utilities and Housekeeping Costs in Residence or Serviced Apartment

Utilities, telephone and cable bills will be taxed based on the actual amount paid by employer.

Gardener and housekeeping costs are $35 per month or actual wages paid by employer, whichever is lower.

Hotel Accommodation or Serviced Apartment within hotel building

2% of basic salary plus prescribed value for each occupant during period of stay

See: Example 5

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

An employee was paid a salary of $200,000 and a bonus of $50,000 in a calendar year. He was also provided with fully furnished accommodation (i.e. a residential apartment) with an AV of $30,000. The total value of furniture and fittings was $2,622. 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 2015
AV of Fully Furnished Residential Apartment

$30,000

Value of Furniture and Fittings

As the apartment is fully furnished, value of furniture and fittings is $15,000 ($30,000 x 50%)

Total Value of Fully Furnished Accommodation

= $45,000 ($30,000 + $15,000)

Less: Rent Paid by Employee

$6,000

Taxable Value of Accommodation Benefit

= $39,000 (i.e. $45,000 - $6,000)

Before YA 2015
Employee's Salary

$200,000

Bonus

$  50,000

Value of Furniture and Fittings

$    2,622

Total Employment Income

= $252,622 ($200,000+$50,000+$2,622)

10% of Employment Income

= $25,262 (10% x $252,622)

 AV of Residential Apartment$30,000 
 Lower Amount of AV OR 10% of Employment Income$25,262
 Less: Rent Paid by Employee$6,000 
 Taxable Value of Accommodation Benefit = $21,884 (i.e. $25,262 + $2,622 - $6,000)

Before YA 2015, the taxable benefit of the furniture and fittings will depend on the items that have been provided to the employee. The value of each item is provided in the list on the value of the furniture and fittings and related benefits .

In this example, the total value of furniture and fittings of $2,622 is arrived at as follows:

  • 3 units of air-conditioners: $360
  • Blender: $36
  • Clothes dryer: $$180
  • Cooker: $30
  • Dish washer: $180
  • Furniture: $120
  • Home entertainment theatre: $360
  • Oven: $30
  • 3 units of standing lights/lamps: $36
  • Refrigerator: $120
  • Surveillance system: $360
  • TV: $360
  • DVD player: $240
  • Water heater: $30
  • Washing Machine: $180

Assume similar circumstances as in Example 1 except that the apartment is shared with another employee.

The taxable value of the accommodation as well as furniture and fittings for each employee are computed as follows:

From YA 2015
AV of Fully Furnished Residential Apartment

$30,000

Taxable Value of Accommodation

= $15,000 ($30,000 / 2)

Value of Furniture and Fittings

= $ 7,500 ($15,000 x 50%)

Total Value of Fully Furnished  Accommodation

= $22,500 ($15,000 + $ 7,500)

Less: Rent Paid by each Employee

$6,000

Taxable Value of Shared Accommodation

= $16,500 (i.e. $22,500 - $6,000)

Before YA 2015
Employee's Salary

$200,000

Bonus

$  50,000

Value of Furniture and Fittings

= $ 1,311 ($2,622 / 2)

Total Employment Income

= $251,311 ($200,000+$50,000+$1,311)

10% of Employment Income

= $25,131 (10% x $251,311)

AV of Residential Apartment = $15,000 ($30,000 / 2) 
Lower Amount of AV OR 10% of Employment Income $15,000 
Less: Rent Paid by each Employee $6,000 
Taxable Value of Shared Accommodation  = $10,311 (i.e. $15,000 + $1,311 - $6,000)
Employment Period 365 days 
 Accommodation Provided for 90 days
 Annual Value of Property $40,000
 Value of Furniture and Fittings per year (based on number of items provided for YA2014 and earlier) $300
 Utilities Bill $250
 Rent Paid by Employee $2,000
 Number of Employees Sharing the Premises 1
 Employee's Annual Remuneration $180,000

 

The taxable value is computed as follows: 

   From YA 2015
AV of Property $40,000
Taxable Value of Accommodation                                      =$9,863 ($40,000 x 90/365) 
Value of Furniture and Fittings  =$4,931 ($9,862 x 50%)
 Less: Rent Paid by Employee $2,000
 Taxable Value of Accommodation Benefit =$12,794 ($9,863 + $4,931 - $2,000)

Note: The actual utilities bills of $250 is to be reported separately.

Before YA 2015
Employee's Salary

$180,000

Value of Furniture & Fittings per year (based on number of items provided for YA 2014 and before) $300 
Utilities Bill $250 

Number of Days Accommodation was provided

90 days

10% of Employment Income

= $4,470

[10% x {($180,000 + $300) x 90/365 + $250}]

AV of Residential Apartment = $40,000 
AV based on number of days accommodation was provided to employee= $9,863 (i.e. 40,000 x 90/365)
Lower Amount of AV or 10% of Employment Income $4,470 
Less: Rent Paid by Employee $2,000 
Taxable Value of Accommodation and Furnishing Benefit = $2,544 [i.e. $4,470 + ($300 x 90/365) - $2,000] 

Note: The actual utilities bills of $250 is a benefit-in-kind to be reported separately.

From YA 2015 onwards, the taxable value is the AV of the property less rent paid by the director. The value of furniture and fittings is to be determined based on 40% (partially furnished) or 50% (fully furnished) of AV of the property.

For YA 2014 and previous years, the taxable value depends on whether the director's remuneration is less than the AV of the property.

Director's Remuneration is less than AVDirector's Remuneration is Equal to or More than the AV  

Taxable Value = AV

Taxable value =

(1) The lower of

  • 10% of remuneration, or
  • the AV of the property

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

An employer provided hotel accommodation to one of its employees, his wife and child aged 5 years from 1 Jan 2014 to 31 Jan 2014 (31 days).

The total actual costs incurred by the employer for the hotel stay was $6,200 and the employee paid $500 to the employer. The employee was paid a basic salary of $100,000 in 2014.

From YA 2015

Total Cost of Hotel Stay Paid by Employer

$6,200

Cost of Hotel Stay Paid by Employee

$500

Employee's Salary in 2014

$100,000

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).

Before YA 2015

Use the same information as above except that the hotel accommodation was provided for the period from 1 Jan 2013 to 31 Jan 2013 (31 days). The taxable value of the hotel accommodation is as follows:

Total Cost of Hotel Stay Paid by Employer  $6,200 
Cost of Hotel Stay Paid by Employee $500
Employee's Salary in 2013 $100,000
Number of days accommodation was provided to employee 31 days
Rate per person per month  
- Employee  $250
- Spouse  $250
- Child  $50 
Taxable Value of Hotel Accommodation Benefit

= $730  [2% x ($100,000 x 31/365 days)] + [($250 + $250 + $50) x 12 x 31/365 days)]

The hotel rate per person per month before YA 2015 is as follows:

 A) No. of personsB) Rate per person per month ($)C) No. of days hotel is providedD) Value ($)a A x B (rate per month x 12 months) x C  (number of days / 365 days)

Employee

 

250

  

Employee's Spouse

 

250

  

Employee's Child

> 20 years old

< 3 years old

3 - 7 years old

8 to 20 years old

 

  

 

250

 

50

 

25

 

100

  
  • 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.

  • Why is there a change in the tax treatment of accommodation from Year of Assessment 2015 onwards?

    The current prescribed formulas and rates used for computing housing and hotel accommodation for employees have remained unchanged since the 1960s and do not reflect the actual benefits enjoyed by the employees who were provided with such benefits.

    The tax change, therefore, simplifies tax compliance for determining the taxable value of housing-related benefits and makes our tax system more equitable.

  • 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?

    Employers are required to use the AV to compute taxable accommodation benefits. Instead of AV, employers may also use the actual market rent paid for the accommodation to report the housing benefit, if it is administratively more convenient to do so. This also applies to cases where the AV is unavailable.

    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). They cannot do separate reporting for taxable accommodation and 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.

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