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:

  • accommodation in Singapore (including the furniture and fittings provided together with the accommodation)
  • food, transport, and daily necessities for consumption in Singapore

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 during the COVID-19 pandemic to ensure the continuity of his employer’s business during the pandemic; 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.

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 necessitiesAmount 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 condition (b), those benefits received on/after 1 Feb 2020 will qualify for the exemption. The fact that the employee may have received similar benefits in Singapore before 1 Feb 2020 due to work exigencies will not prohibit the application of the exemption, provided all other conditions for the exemption are 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 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?

A4. Examples of benefits that meet this condition are:

i. transport benefits provided for employees to travel from home to office and vice versa, or travel from home to an alternative workplace as part of business continuity plans;

ii. meal payments and food provided for essential staff working in office premises during the COVID-19 period.

Examples of benefits that do not meet this condition are:

i. benefits to offset telecommuting expenses such as utilities;

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


List of Frequently Asked Questions (FAQ)

Explainer Video

Explainer Video QR_Covid-19_Individuals