Exemption for Employment Benefits for Accommodation, Food, Transport and Daily Necessities

Arising from the COVID-19 pandemic, movement restrictions have been imposed within and across borders. To support employees who are affected by such circumstances arising from the COVID-19 pandemic, employers may provide accommodation and other types of benefits to their employees.

In recognition that employees receive such benefits from their employers due to circumstances arising from the COVID-19 pandemic (such as Malaysia’s Movement Control Order), a tax exemption up to a specified amount, will be granted on these benefits, subject to conditions. This exemption only applies to qualifying benefits that an employee receives from his employer in the calendar year 2020.

Qualifying benefits that are eligible for the tax exemption

Cash allowance, reimbursement or benefits-in-kind for any of the following items for the employee's use/consumption in Singapore:

  • accommodation (including the furniture and fittings provided together with the accommodation)
  • food, transport, and daily necessities ("basic necessities")

Qualifying conditions

The exemption is subject to the following two conditions:

  1. The employee (and other employees performing a similar job scope) did not ordinarily receive such benefits in Singapore before 1 Feb 2020; and
  2. The employer has provided the benefits either because:

i. the employee normally resides outside Singapore, but is required to reside in Singapore to ensure the continuity of his employer’s business at any time between 1 Feb 2020 and 31 Dec 2020 (both dates inclusive); or

ii. the provision of the benefit will reduce the risks that the employee will be infected with COVID-19, or infect others with COVID-19. Specifically, such benefits are treated as being provided to reduce the mentioned risks in the following scenarios:

A. For provision of accommodation or allowance for accommodation

(i) where there is a high risk of the employee contracting COVID-19 due to the nature of his employment, or because the employee is required to travel out of Singapore for his employment at any time between 1 Feb 2020 and 31 Dec 2020 (both dates inclusive), the provision of accommodation will reduce the risk that the employee will infect others with COVID-19. 

B. For provision of basic necessities or allowance for basic necessities

(i) where there is a high risk of the employee contracting COVID-19 due to the nature of the employee’s employment, or because the employee is required to travel out of Singapore for his employment at any time between 1 Feb 2020 and 31 Dec 2020 (both dates inclusive), the provision of basic necessities will reduce the risk of the employee contracting COVID-19, or the risk that the employee will infect others with COVID-19; or

(ii) where there is an elevated risk of the employee contracting COVID-19 due to a requirement of his employment that is imposed at any time between 1 Feb 2020 and 31 Dec 2020 (both dates inclusive) in order to ensure business continuity, the provision of basic necessities will reduce that risk.

Please refer to the Frequently Asked Questions below for guidance on when the qualifying conditions may be regarded as met.

All other employment benefits that do not meet the above conditions will be subject to the usual tax treatment and are generally taxable, unless they are found in the list of benefits-in-kind granted administrative concession or exempt from income tax.

Amount of exemption

If conditions (1) and (2) are met, the amount of exemption is as follows:

Type of benefit  Amount of exemption
Benefits for accommodation (including furniture and fittings in the accommodation) Amount of cash allowance, reimbursement or value of the accommodation (including furniture and fittings), subject to a total cap of $75 per day per employee
Benefits for food, transport, and/or daily necessities Amount of cash allowance, reimbursement or value of benefits for food, transport, and/or daily necessities, subject to a cap of $50 (applied on the total amount for all items) per day per employee

Benefits that are found in the list of benefits-in-kind granted administrative concession or exempt from income tax will not count towards the caps of $75 or $50 per day per employee indicated above.

If an employer is providing such benefits in the form of a lump-sum cash allowance, the employer should state the period to which the allowance is applicable, so as to determine whether the amount meets the exemption threshold on a per day basis.

For example, the employer provides a monthly allowance for accommodation of $2,500 for the period from Feb to Mar 2020. The total allowance provided is therefore $5,000 (2 x $2,500). The exemption is capped at $4,500 [$75/day x 60 days (29 days in Feb 2020 + 31 days in Mar 2020)]. Hence, the excess of allowance above the cap, i.e. $500 ($5,000 - $4,500), is taxable as the employee’s employment income.     

Frequently Asked Questions

Q1. I live in Malaysia but work in Singapore. My employer provided me with temporary accommodation in Singapore due to COVID-19. Would I be considered to have “ordinarily received” accommodation benefits if I was previously provided with accommodation overseas when I travelled overseas for work?

A1. An employee may have received similar benefits (e.g. overseas accommodation or overseas cost of living benefits) before 1 Feb 2020 due to overseas work trips (i.e. outside Singapore). The employee will not be considered as one who has ordinarily received such benefits in Singapore. This means that the employee can still qualify for the exemption if all other conditions for the exemption is met.  

Q2. I am a foreigner working in Singapore and my employer had provided me with accommodation in Singapore even before COVID-19. Can I claim the exemption on the accommodation benefit provided in 2020?

A2.An employee who received accommodation benefits in Singapore before 1 Feb 2020 cannot qualify for this exemption for accommodation benefits received in 2020. In this instance, the employee would be regarded as being ordinarily in receipt of such accommodation benefits in Singapore.

Q3. My employer provided me with meals and transport due to COVID-19. Would I be considered to have “ordinarily received” such benefits in Singapore before 1 Feb 2020 if my employer had provided me with overtime meal and transport allowance for working beyond official working hours?

A3. For benefits for food, transport and daily necessities, if the employee has received these benefits on/after 1 Feb 2020 due to reason(s) stated in conditions 2(i) or (ii), those benefits received on/after 1 Feb 2020 will qualify for the exemption. An employee who received similar benefits in Singapore before 1 Feb 2020 due to work exigencies can still qualify for the exemption, provided that condition 2(i) or (ii) is met. In other words, an employee who received overtime meal and transport allowance for working beyond official working hours will not be regarded as one who ordinarily receives such benefits.

Q4. What is an example of an employee having a high risk of contracting COVID-19 due to the nature of his employment?

A4. An example of an employee with a high risk of contracting COVID-19 due to the nature of his employment is if he is required to provide care to individuals who have contracted or are suspected to have contracted COVID 19, such as a healthcare worker. 

Q5. What is an example of an employee having an elevated risk of contracting COVID-19 due to a requirement of his employment?

A5. An example of an employee with an elevated risk of contracting COVID-19 due to a requirement of his employment, is if he is required to report to a workplace that is not his place of residence, for business continuity reasons, during the Circuit Breaker period from 7 April 2020 to 1 June 2020. 

Q6. What are some examples of benefits provided that would reduce the risks that the employee will be infected with COVID-19, or infect others with COVID-19?

A6. Examples of benefits that meet this condition are:

(i) transport benefits provided for employees to travel from the place of residence to office and vice versa, or travel from the place of residence to an alternative workplace as part of business continuity plans;

(ii) meal payments and food provided for essential staff working in office premises, as part of business continuity plans.

Examples of benefits that do not meet this condition are:

(i) benefits to offset telecommuting expenses such as utilities*;

*Electricity/telecommunication expenses incurred for work purposes (and not for private purposes) while telecommuting (i.e. working from home), that are reimbursed by an employer, are not taxable as employment income. On the other hand, a cash allowance given by an employer, including an allowance to offset telecommuting expenses, is taxable. However, in this case, deduction for the electricity/telecommunication expenses incurred for work purposes can be claimed against the employee’s employment income for the year. Refer to the guidance on Working from Home Expenses.

(ii) benefits to subsidise the purchase of healthcare items/supplements.


List of Frequently Asked Questions (FAQ) (PDF, 646KB)

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