This guide will explain what is the tax exemption on the BIK received by an employee. END OF GUIDE

This guide explains the prescribed average life span of various assets provided by employers to employees for Benefit-In-Kind (BIK). END OF GUIDE

This guide explains the prescribed value of motorcar and it's related benefits in Benefit-In-Kind (BIK). APPENDIX 2-(a) The Prescribed Value of Motorcar and its Related Benefits END OF GUIDE

This guide will explain the Prescribed Value of Household Furnishing, Apparatus and Appliances in Benefits-In-Kind (BIK). END OF GUIDE

This guide will explain the Prescribed Value of Other Benefits in Benefit-In-Kind (BIK). END OF GUIDE

This guide will assisting you in further understanding what is BIK BIK – Commonly known as Benefit in Kind, is basically a kind of benefit that is provided by the employer to the employee. The benefits received by the employee from the employer is not convertible to cash meaning it cannot be sold, assigned and / or exchange for cash. Benefits in Kind (BIK) are taxable incomes but there are certain Benefit in Kind (BIK) are tax exempted or are regarded as not taxable.  END OF GUIDE

This guide will assist you in determining the value of BIK (Benefit in Kind). There are two methods when it comes to determining the value of the BIK:  First Method: Formula Method  - Each benefit provided to the employee is ascertained by using the     following formula: - Cost of asset provided divided by prescribed average life span of the asset equals      to the annual value of the benefit. - The benefit can be abated if the benefit is: i. Shared with another employee, and/or ii. Provided for less than a year, and / or  iii. Used for the purpose of the business of the employer. Second Method: The Prescribed Value Method - Whichever method is used in determining the value of the benefit provided, the basis of computing the benefit (whether the formula method or the prescribed value method) must be consistently applied throughout the period of the provision of the benefit. - The benefit can be abated if the benefit is:  i. Shared with another employee, and/or ii. Provided for less than a year END OF GUIDE  

When a motorcar is provided to an employee, the Benefit-in-Kind (BIK) is assessed based on the employee's private use of the vehicle and any related benefits provided, such as petrol. A motorcar is generally considered to be used for private purposes if: It is used for travelling between home and the workplace. It is kept at the employee's residence. It is available for personal or family use outside of official duties. Where private use exists, the benefit is considered taxable and must be included in payroll for PCB (Monthly Tax Deduction) calculation purposes.  Scenario: Employee A is provided with a new Toyota Hilux costing RM95,000 in the year 2019. The vehicle is available for the employee's use throughout the entire year. The taxable BIK can be calculated using either of the following methods. A) Formula Method Under the Formula Method, an abatement of 20% is applied to account for vehicle depreciation upon its return to the employer.  Annual BIK Value  = Cost of Motorcar ÷ 8 Years × 80% = RM95,000 ÷ 8 × 80% = RM9,500 per year B) Prescribed Value Method Under the Prescribed Value Method, the BIK value is determined according to Appendix 2 – The Prescribed Value of Motorcars and Related Benefits issued by the tax authority. The valuation is based on the original cost of the vehicle and applies to: New vehicles Second-hand vehicles Leased vehicles For a motorcar costing RM95,000, the prescribed annual BIK value is: = RM3,600 per year

For Benefit-in-Kind (BIK) calculations under the prescribed value method, different categories of benefits are valued according to guidelines stated in Appendix 2. A) Household Furnishings, Apparatus and Appliances The prescribed value is determined based on Appendix 2(b): Prescribed Value of Household Furnishing, Apparatus and Appliances. This includes items such as furniture, electrical appliances, and other household equipment provided by the employer. B) Other Benefits Other benefits are valued based on Appendix 2(c): Prescribed Value of Other Benefits, which lists specific non-cash benefits provided to employees that are subject to BIK valuation. C) Benefits Not Listed in Appendix For benefits not specified in the prescribed value list, the value will be calculated using the formula: Annual Value of Benefit = Cost of Asset Provided ÷ Prescribed Average Life Span of Asset

Benefit-in-Kind (BIK) refers to non-cash benefits provided by an employer to employees. These benefits must be properly configured in the system to ensure accurate payroll processing and tax (PCB) calculations.  Steps to Setup BIK Item(s) for an Employee: Go to Payroll > Employee Maintenance. Locate the employee and click the pencil icon next to the employee. Go to Addition & Deduction. Click + Add Payroll Item. Go to the BIK tab and choose the relevant BIK item(s).  Click + Add.  Click the pencil icon next to the newly added BIK item to update the amount. Enter the details: Start Period / End Period – Define the validity period of the BIK. Amount – Enter the BIK value. Tax Exempted Rule – Select the applicable tax exemption rule. Click Save.   Click Save changes to apply the setup.