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What is Benefits In Kind (BIK)?

BIK are non-cash benefits provided by employers to their employees and are treated as income of the employees


What is BIK ?

BIK 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.

Calculating

How to determine value of BIK?

The Formula Method
Annual Value of the benefit
=
Cost of the asset that is provided as benefit / amenity
Prescribed average life span of the asset
Here, cost means the actual cost incurred by the employer

The Prescribed Value Method
The schedules for the prescribed values of the benefits commonly provided to the employee are as the table provided below.

The value of BIK based on the prescribed value method provided to the employee by the employer can be abated if the BIK is –
  • Provided for less than a year
  • Shared with another employee
  • Prescribed Value of BIT (click to see more)

Tax Exemption On BIKs

There are certain benefits-in-kind which are either exempted from tax or are regarded as not taxable.

  • Dental benefit
  • Child-care benefit
  • Food & drink provided free of charge
  • Free transportation between pick-up points or home and place of work (to and from)
  • Insurance premiums which are obligatory for foreign workers as a replacement to SOCSO contributions
  • Group insurance premium to cover workers in the event of an accident
  • Discounted price for consumable business products of the employer and discounted price for services provided by the employer
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