Benefits-in-kind are benefits provided by or on behalf of your employer that cannot be converted into money. These benefits are normally part of your taxable income, except for tax exempt benefits which will not be part of your taxable income.

Tax exemption applies to the benefits-in-kind listed below, unless you have control over your employer (for more information, please read What are the restrictions for claiming tax exemptions?)

Benefit Details
Dental benefit Tax exempt
Childcare benefit Childcare provided by employers, e.g. a childcare center, is tax exempt
Food and drink provided free of charge Tax exempt
Free transportation between pickup points or home and the place of work (to and from) Tax exempt
Obligatory insurance premiums for foreign workers Tax exempt
Group insurance premium to cover workers in the event of an accident Tax exempt
Leave passage Tax exempt for travel:

in Malaysia (not more than three times a year); or

overseas (not more than once a year) with tax exemption limit of RM3,000

provided to employee and immediate family only.

Benefits used by employer to perform his employment duties Tax exempt
Discounts on goods and services provided by the employer Tax exempt provided that they are:

not convertible into money by the employee even though they have money’s worth;

for the benefit of the employee and are used by the employee personally; and

provided to employees as a whole and not provided specifically to a certain group of employees only.

Note: discounts on goods are only tax exempt up to a value of RM1,000.

Benefits and monthly bills for fixed line telephones, mobile phones, pagers, PDAs and broadband The amount to be exempted includes registration cost and installation cost. The exemption given is limited to one unit for each class of assets.
Benefits for medical treatment Tax exempt for modern medicine, traditional medicine and maternity. Treatment must be by certified medical doctors or medical practitioners registered with government-approved bodies.
Petrol benefits Exemption up to RM6,000 for petrol used for official duty (this limit also applies to any petrol allowance/travel allowance/toll payment). Amounts above RM6,000 may be claimed if records are kept for 7 years.

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Some frequently asked questions...

Benefits-in-kind refer to non-monetary benefits provided by your employer, including a company car, driver hired by the employer, or living accommodation. 

Benefits-in-kind are normally considered part of an employee’s taxable income, unless a specific exemption applies. Tax exemptions do not apply to an employee having control over the employer.

Yes, dental benefits are tax exempt.

Yes, childcare provided by employers, e.g. childcare centre, is tax exempt.

Tax exemption for discounts on goods and services provided by the employer is granted up to a limit of RM 1,000 annually under the condition that:

  • the benefits cannot be converted into money by the employee, even if they hold monetary value;
  • the benefits are for the personal use and benefit of the employee; and
  • the benefits are provided to all employees collectively and not exclusively to a specific group of employees.

Yes, food and drinks provided free of charge are tax exempt.

Yes, tax exemption is applicable for travel:

  • within Malaysia (limited to a maximum of three times per year); or
  • abroad (limited to one trip per year) with a tax exemption limit of RM 3,000.

This benefit is extended exclusively to the employee and their immediate family.

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