The following are some frequently asked questions that we often encounter:
Are all benefits provided by employers in Malaysia tax-exempt?
How can I find out the current tax-exempt benefits for employees in Malaysia?
Is there a maximum limit for tax-exempt benefits, such as child education fees or long service awards?
It is a significant advantage for employers and employees to know which benefits are tax-exempt.
In Malaysia, certain benefits given by employers have been deemed to be exempted from income tax so that they are not taxed.
However, it is worth noting that the tax legislation varies, so keeping up to date with the most recent LHDN guidance or seeking advice from a tax professional will be of great help in providing accurate and timely information.
Medical and Dental Benefits:
The health and dental coverage provided by employers is one of the most significant tax exemption benefits. This covers not only employees but also their spouses and children.
This exemption encourages the promotion of employee well-being and healthcare support.
Group Insurance Premiums:
Group Insurance Premiums: The premiums incurred by employees for the group insurance, e.g. life assurance or accident insurance, are commonly considered exempt from taxation. This provision, which does not increase their taxation burden, provides a security shield for employees and their families.
Child Education Fees:
In certain cases, payments made by employers for their employees' children's education at approved institutions could be tax-exempt, up to specific limits.
Meal and Transportation Allowances:
Allowances for meals and transportation: Income tax could be waived on reasonable allowances granted in respect of meals and transport, especially when used for business purposes or while traveling to work.
Uniforms and Special Clothing:
Uniforms and special clothes: Income tax may be exempted for the value of uniforms or special clothing furnished by employers to assist staff in carrying out their duties. For sectors where uniforms play a key role in work, this is particularly relevant.
Long Service Awards:
An exemption from income tax may be granted, up to certain limits, for recognition of employee loyalty, dedication, awards, or gifts for long service.
Mobile Phones:
Providing mobile phones for business purposes, along with the related bill costs, could be deemed tax-exempt.
Relocation Expenses:
When employees are required to relocate for work, certain expenses related to this relocation might be considered tax-exempt.
Housing Accommodation:
Accommodation provided by employers might be exempt from tax if it's necessary for an employee's role.
Stay Informed and Seek Professional Advice
It is essential to keep up to date with the most recent regulations and interpretations provided by the authorities in view of the dynamic nature of tax legislation.
Consulting the official resources from LHDN or enlisting the expertise of tax professionals ensures that you're accurately navigating the realm of tax-exempt benefits-in-kind. 😎