Benefit in kind (BIK)

What is Benefit in kind?
a. Paragraph 13(1)(b) of the Act provides that the gross income of an employee from an employment also includes any amount equivalent to the BIK provided to the employee by/on behalf of his employer to be personally enjoyed by that employee.

b. BIKs are benefits not convertible into money, even though they have monetary value. The phrase "not convertible into money" means that when the benefit is provided to the employee, that benefit cannot be sold, assigned or exchanged for cash either because of the employment contract or due to the nature of the benefit itself.

c. All BIKs received by an employee are taxable except:
i. medical, dental or chld-care benefit

ii. a benefit consisting of
    aa) leave assage in Malaysia of not more than 3 times in one calendar year; or
    bb) oversea leave passage of not more than once in any calendar year limited to a maximum amount of RM 3,000.
The exemption of this benefit is only applicable if it is provided to the employee and members of his immediate family.

iii. benefit used by the employee solely for purposes of performing his employment duty.

d. Non-taxable benefits include:-
i. Goods and services offered at discounted prices.
ii. Dental benefit
iii. Childcare benefit
iv. Food and drink provided free of charge
v. Free transportation between pick-up points or home and the place of work (to and fro)
vi. Insurance premium which are obligatory for foreign workers as a replacement to SOCSO contributions
vii. Group insurance premium to cover workers in the event of an accident.