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Employee Benefits That are Tax Deductible (Employers) & Tax Exempted (Employees)

What are the employee benefits that are tax deductible for employers and tax exempted for employees? Let’s check it out!

Employee Benefits That are Tax Deductible (Employers) & Tax Exempted (Employees)

Employee Benefits That are Tax Deductible (Employers) & Tax Exempted (Employees):

  • Parking Fee / Allowance (Limit to reasonable amount)
  • Official Travelling Allowance
  • Meal Allowance (Limit to reasonable amount)
  • Dental Benefit
  • Medical Treatment
  • Childcare Allowance
  • Subsidies on Interest (Limit to loan amount less than RM300k)
  • Professional Subscriptions
  • Obligatory Insurance Premium
  • Innovation Award
  • Productivity Award
  • Long Services Award (For services more than 10 years)
  • Monthly Bills for Telephone (Limit to 1 phone line)
  • Gift of a Handphone (Limit to 1 unit)
  • Leave Passage in Malaysia
  • Gift of Own Products (For products less than RM1,000)

Take this for example:

These are the benefit that company provide for Staff A within a year:

  • Travelling allowance RM6,000
  • Meal allowance RM3,600
  • Dental benefits RM800
  • Childcare allowance RM2,400
  • Professional subscription RM1,000
  • Long services award RM2,000
  • Free gift of handphone RM6,000
  • Domestic travel RM1,000
  • Gift or own product RM1,000

These benefit worth RM23,800 in a year. All the benefit Staff A enjoyed is tax deductible for the company and tax exempted for him!

In this case, he can enjoy a total tax exemption up to RM6,700.

While the company can enjoy tax deduction on this benefit!

*Kindly take note that this rule is not applicable for those employees who have controlling power of the company. (Having controlling power: Holding more than 50% of the company shares)

⇒Did your accountant or tax agent advise you on this rule? Without it, your company expenses may get higher! Hence, having a tax agent that always give you advise is mandatory for your company!

If you are looking for accountant, contact us now!