Skip to main content

9. What happens with respect to assessable income if the employer does not provide a place of residence to the employee, but refunds all or part of the rent paid by that employee?

Such an arrangement can be treated the same as the employer directly providing a place of residence to the employee. The rental value (RV) will be calculated and included in the employee's Assessable Income, and the actual reimbursement of rent paid to the employee will not be treated as income (i.e. the reimbursement will not be directly added to the employee's assessable income).


The contract of employment should specifically describe the rent reimbursement payment as rent paid by the employee. The employer and the employee then act in accordance with the contractual term. For these purposes, both parties should keep all the documents evidencing that the employer has made reasonable supervision over the reimbursements (e.g. copies of the tenancy agreement, rental receipts and employment contract, etc.). Otherwise, the Assessor may regard the payment as cash allowance and include the full amount as income in the employee's assessable income.




Ms. H was paid a salary of $50,000 and an accommodation benefit of $10,000 per month. She occupied a flat for which she paid $8,000 per month. How should her Assessable Income be computed?


If Ms. H's employer has implemented proper procedures controlling how employees' housing benefits are actually utilized (e.g. stating that benefits on her employment contract and keep written record on how the money was spent), the Assessor would accept that Ms H was provided with a place of residence by her employer. However, as Ms. H only used $8,000 on the payment of rent, the remaining $2,000 would be regarded as a cash allowance. Her Assessable Income would be computed as follows:




Salary $(50,000 x 12)


Cash allowance $(2,000 x 12)




RV $(624,000 x 10%)


Assessable Income


On the contrary, if the employer has NOT implemented proper controlling procedures over housing benefits, the Assessor will treat the full amount of $10,000 as a cash allowance. Ms. H's assessable income would then be computed as follows:




Salary ($50,000 x 12)


Cash allowance ($10,000 x 12)


Assessable Income



Retention of documents


When filing the Tax Return, there is no need to attach the tenancy agreement, rental receipts, or other documents evidencing payments of rent. Such documents, however, should be retained so that they can be produced to the Assessor for review upon request.