The following are 3 frequently asked questions that we often encounter:
Why is there a Benefits-in-Kind (BIK) amount showing in the EA Form for company cars?
How do I determine the correct BIK value for motor vehicles provided to employees?
Do I need to report the full annual BIK value even if the car was only used part of the year?
When a company provides a vehicle or covers fuel expenses for an employee, these are considered non-cash benefits under Malaysian tax law. These are referred to as Benefits-in-Kind (BIK) and must be included in the employee’s gross income for tax purposes.
🚗 What Counts as a Motor Vehicle BIK?
You should declare BIK when the company provides:
A car for personal or mixed-use
Fuel for personal or business use
A driver
Car maintenance or insurance covered by the company
These benefits must be reflected in the employee’s EA Form and will affect their PCB (Potongan Cukai Bulanan) or personal tax filings.
How to Determine the BIK Value
The Inland Revenue Board of Malaysia (LHDN) provides a prescribed value table based on the cost of the vehicle to the employer. This is the most common and straightforward method used.
Example Table (Prescribed Method):
Car Cost (RM) | BIK Without Fuel (RM/year) | BIK With Fuel (RM/year) |
≤ 50,000 | 1,200 | 1,800 |
75,001 – 100,000 | 3,600 | 5,400 |
150,001 – 200,000 | 7,000 | 10,000 |
> 500,000 | 25,000 | 30,000 |
If you provide both a car and fuel, the combined value must be declared.
What if a Driver is Provided?
If the company also provides a driver, you’ll need to declare an additional RM 7,200 per year (RM 600/month) as BIK.
Reporting in the EA Form
BIK for motor vehicles should be:
Declared under "Benefits-in-Kind" (Box E) in the EA Form
Included in the employee’s gross taxable income
Note: Even if the car is used for only part of the year, LHDN's guidelines apply the full BIK value unless prorated manually and justifiably.
Documentation and Record-Keeping
To support BIK reporting:
Keep vehicle purchase invoices
Maintain records of fuel expenses
Note the date of assignment if the car was only used part-year
Track if the employee contributed any payment (this can reduce the BIK value)
How to Enter Vehicle BIK in Talenox
The BIK values can be manually entered into the employee’s payroll so the EA Form reflects them accurately.
When processing Payments in Payroll:
If the vehicle BIK is monetary (e.g. cash car allowance):
Go to:
Step 2 – Select Pay Item
Under the Ad Hoc Payment/Deduction tab
Choose “Benefits in Kind”
If the vehicle BIK is non-monetary (e.g. company car provided):
Go to:
Step 3 – Select Tax Deductions and BIK/VOLA (non-monetary)
Then select “Benefits in Kind”
These entries will be reflected under the correct BIK section (Box E) in the employee’s EA Form at year-end.