Cloud Payroll - BIK : What is the Tax Exemption on BIK Received by an Employee?

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Question :
What is the Tax Exemption on BIK Received by an Employee?


Answer :

ITEM BENEFIT DETAILS
1. Dental benefit Tax exempt
2. Child care benefit Childcare centres provided by employers is tax exempt
3. Food and drink provided free of charge Tax exempt
4. Free transportation between pickup points or home and place of work (to and from) Tax exempt
5. Obligatory insurance premiums for foreign worker Tax exempt
6. Group insurance premium to cover workers in the event of an accident Tax exempt
7. Leave passage i. in Malaysia (not more than 3 times per year) is tax exempted,

or
ii. Overseas (not more than once per year) and limited to maximum amount of RM3,000

Both i. and ii. Only applicable for employee and their immediate family only.

8. Benefits used by the employee solely for purposes of performing his employment duty Tax exempt
9. Discounted price for consumable business products of the employer and discounted price for services provided by the employer Discounts on goods are tax exempt only up RM1,000,

and
i. goods not convertible into money even they have money’s worth
ii. used by employee personally
iii. Provided to employee as a whole, and not to specific group of employees

10. Benefits and monthly bills for fixed line telephone, mobile phone, pager, PDA, and subscription of broadband Benefits register under employer’s name is fully tax exempted, limited to one unit for each asset category
11. Modern medicine, traditional medicine, and maternity Tax exempt

i. modern medicine
ii. traditional medicine
- qualifies only if the medical practitioner is certified or registered in accordance with the rules by the Minister of Health
iii. Maternity expenses
- treatment must be given by certified medical doctors who practice modern medicine, or
- medical practitioners certified or registered in accordance with the rules by the Minister of Health

12. Benefit on free petrol An employee is given an option to;

i. determine the amount of free petrol based on the annual prescribed value for petrol as per Appendix 2 without any exemption,
or
ii. tax exemption on free petrol limited to RM6,000 per year for travelling and the excess exeeding RM6,000 to be chargebale to tax



For more information and examples for BIK, you may refer Public Ruling 11/2019.


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