Taxation on Housing Allowance

For Singapore tax purposes, housing is dealt with separately, which I will deal with in a moment. For every other kind of assistance, the dollar value of the perk is simply treated as income. Tuition allowances, health insurance payments, everything... is income and taxed at regular rates. If your employer pays your taxes, that is taxable income as well. If you employer pays for your club membership that cost of the membership is a taxable benefit to you.

For housing the following applies. If you are simply given a housing allowance and you pay your own rent, then the entire amount is taxable at normal income tax rates. If however, the lease is held in the name of the company, and the company pays the rent to the landlord, then the tax is computed as follows: (1) The lower of a) 10% of your employment income, or b) the annual value of the premises. This amount is further reduced by any amount you actually contribute to the rent.

As an example, your company rents you a place at $5000 per month or $60,000 per year. You make $300,000 a year. Your taxable value for the housing provided is 10 percent of $300,000 or $30,000 since that is less than the actual value of the rental..

Source: Singapore Expats Forum

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20 May 2013
Singapore Expats Forum