Among the types of perquisites commonly given to an employee by the employer are:
(a) Pecuniary liability of employees paid by the employer, such as income tax payment, electricity bills, water and telephone bills
(b) Credit card facilities
(c) Loan interest
(d) Recreational club membership
(e) Tuition or school fees of child
(f) Life insurance premium
(g) Gardener, driver, domestic help or guard (employed by employee)
(h) Waiver of loan or advance
(j) Assets given free of charge or sold at a discount
(k) Gift vouchers
(l) Gift of personal computer to the employee by the employer
(m) Excellent public service award
(n) Professional subscriptions
The value of a perquisite received by the employee is his gross income from employment under paragraph 13(1)(a) of the ITA.
For perquisites having a market value, the value of the perquisite is ascertained as follows:
Market value of perquisite – Amount paid for perquisite received (if any) = Value of the perquisite to tax on the employee
For perquisites not having any market value, the value of the perquisite is ascertained as follows:
Amount of the perquisite – Amount paid for perquisite received (if any) = Value of the perquisite to tax on the employee
(a) Wedding gifts whether in the form of cash, jewellery or other items given to an employee by the employer
(b) Cash given to an employee by the employer for passing the professional examination with excellent results
(c) Cash, other items or certificate of appreciation given to a bank employee by the employer or third parties for successfully foiling an attempted bank robbery
(d) Cash, other items and certificate of appreciation given to an employee for his/her achievement in some extraordinary feats such as –
– Swimming across the English Channel
– Sailing around the world with in a specified period of time
– Climbed the highest mountain in the world
– Other similar feats.
Tax Exempt Allowance
Petrol & Travelling
Petrol card / allowance / travel allowance / toll payment (for official duties)
In order to qualify for the exemption, the employer has to identify
i) The amount of travelling allowance, petrol allowance or toll rate provided to the employee for
: Travel between home and place of work , or
: Exercising employment
If the employer is unable to identify the abovementioned amount provided to the employee for travel between home and place of work; and/or the amount of allowance provided to the employee for travel in exercising employment, the amount of travelling allowance exempted is up to a maximum of RM6,000.
Parking rate and allowance (actual amount expended)
Parking rate or parking allowance received by an employee is exempted from tax. This exemption includes parking rate paid by employer directly to the parking operator and parking allowance paid to his employee.
The amount must be reasonable and not excessive.
Example 18 in Public Ruling No.05/2019 on Perquisite refers : whereby parking allowance of RM180 received per month by employee is exempted from tax.
Meal allowance on regular basis (actual amount expended)
Meal allowance received by an employee on a regular basis, for example on daily or monthly basis given at the same rate to all employees is exempted from tax. The amount of meal allowance provided by the employer to his employee has to be reasonable and not excessive.
Meal allowance provided to an employee for purposes such as:
• Overtime or outstation;
• Overseas trips; and
• Other similar purposes in exercising his employment.
The allowance meant to cover meal expenses of the employee. Such meal allowance / per diem is paid according to employee’s position, duties or place where the employment is exercised. The amount has to be given based on the rate fixed in an internal circular or written instruction of employer.
Childcare allowance (up to 12 years of age)
Childcare allowance received by an employee or paid directly by employer to childcare center.
The definition of “child” means a child age of 12 years and below, who is a legitimate child or step (adopted accordance with any law) child of an individual of his wife/husband.
Tax Exempt Allowance
Mobile phone (including cost of registration and installation)
Gift of fixed line telephone, mobile phone, tablet, pager or Personal Digital Assistance (PDA) including cost of registration and installation registered in the name of employee or name of employer.
1 unit for each category of asset
Monthly phone bills
Monthly bills or subscription of broadband including cost of registration and installation registered in the name of employee or name of employer.
Fixed allowance is taxable under s.13(1)(a).
1 line for each category of asset
: Past achievement,
: Service excellence,
: Long service (10 years within same employer or within same group of companies),
: Innovation or productivity award.
|Subsidized interest for housing, education or car loan (loan does not exceed RM300,000)
The exemption of subsidized interest on housing loan is applicable to any type of residential property and regardless whether the employee already owns another residential property.
Exemption of subsidized interest on education loan is only in relation to education loan which is utilized for the employee’s own education.
Exemption of subsidized interest for car loan means a motor vehicle other than commercial vehicle.
Educational Loan under PTPTN
Educational loan under PTPTN paid by an employer on behalf of his employee who is a Malaysian citizen, full time and not his relative. [PU(A) 414/2019 : YA 2019 to YA 2021]
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