The following are the list of income which are tax-free and their limits :-
- Petrol card, petrol allowance or travel allowance between the home and work place (until Year Assessment 2010 only) (Limit RM2,400 a year)
- Petrol card, petrol allowance or travel allowance and toll card for official duties (Limit RM6,000 a year)
- Allowance or fees for parking (No limit)
- Meal allowance (No limit)
- Allowance or subsidies for childcare (Limit RM2,400 a year)
- Medical benefits (including maternity expenses and traditional medicines such as ayurvedic and acupuncture) or dental.(No Limit). What traditional medicines are accepted by the IRD ?
- Employers’ own goods provided free or at a discounted value (Limit RM1,000 a year)
- Employers’ own services provided free or at a discount provided such benefits are not transferable (No Limit)
- Telephone, mobile phone, pager and Personal Data Assistant (PDA) (No Limit)
- Bills for telephone, mobile phone, pager and PDA registered in the name of the employee or the employer (No limit)
- Gift of new personal computer (until Year Assessment 2010 only) (No Limit)
- Monthly broadband subscription fee (registered in the name of the employer) from the employer (until Year Assessment 2010 only) (No Limit)
- Perquisites (whether in money or otherwise) provided to the employee pursuant to his employment in respect of:
(a) past achievement award;
(b) service excellence award, innovation award or productivity award; and
(c) long service award (provided that the employee has exercised an employment for more than 10 years with the same employer); (Limit RM2,000 a year)
- Leave passages (only applicable to employee and immediate family)
(i) Within Malaysia (including food and accommodation) not exceeding 3 times in a year;
(ii) Outside Malaysia (once a year – limited to RM3,000) (Limit RM3,000 a year)
- Compulsory insurance premium paid for foreign employees in lieu of SOCSO payment (No Limit)
- Group insurance premium to protect the employees in the event of accident (No limit)
- Interest subsidies for loans of up to RM300,000 in respect of housing, motor vehicle and education loans. Exemption is given on existing loans and new loans. (No limit)
Please note that those items with no limits does not mean that employers can give any amount it wishes, it must be 'reasonable'. What amount is reasonable depends on the nature of the employee's work.
For example, a reporter's travelling allowance is expected to be higher than that paid to a accounts clerk.
THE ABOVE EXEMPTIONS ARE NOT APPLICABLE TO EMPLOYEES HAVING CONTROL OVER THE COMPANY, SOLE PROPRIETORS OR PARTNERS OF PARTNERSHIP BUSINESSES.