Malaysia Benefits-in-Kind (BIK) & Perquisites Tax Guide 2026: Company Car, Housing Allowance, Loan Subsidies, and How BIK Affects Your PCB
Complete guide to Benefits-in-Kind (BIK) and perquisites tax in Malaysia for YA 2026. Learn how company cars, housing allowances, interest-free loans, credit card fees, and other employer-provided benefits are taxed, the prescribed BIK values by LHDN, how BIK appears on your EA Form, and how it affects your monthly PCB deduction.
A senior manager at a Malaysian bank receives a RM10,000 monthly salary, a company car, a housing allowance of RM2,500 per month, and an interest-free loan from the employer to purchase a personal vehicle. When she files her tax return, she is surprised to find that RM15,000 of benefits-in-kind have been added to her employment income — increasing her tax bill by over RM3,000. Nobody explained at the offer stage that the car, the housing, and the loan were taxable.
Benefits-in-Kind (BIK) and perquisites are among the most misunderstood areas of Malaysian employment tax. Employees think of them as free perks. LHDN treats them as part of your employment income — and taxes them accordingly. Understanding how BIK is valued, reported, and taxed prevents the unpleasant surprise of an unexpected tax bill.
This guide covers the BIK prescribed values for 2026, how perquisites differ from BIK, how BIK appears on your EA Form, and what it means for your monthly PCB.
To see how BIK affects your overall tax position, use the DuitTools PCB calculator .
What Are Benefits-in-Kind and Perquisites?
Benefits-in-Kind (BIK)
A BIK is a benefit provided by the employer that is not convertible into cash. The employee receives the use or enjoyment of something — a car, accommodation, furniture — but does not receive money. Because the benefit has economic value, LHDN taxes it as part of employment income.
Perquisites
A perquisite is a benefit that is either convertible into cash or involves the employer paying a personal expense on behalf of the employee. Examples include:
- Employer paying the employee's personal credit card bill
- Employer paying the employee's personal income tax
- Utility bills for the employee's personal residence paid by the employer
- A cash allowance — this is simply additional salary, fully taxable
The difference
The distinction matters for valuation. BIK is valued using LHDN's prescribed value tables. Perquisites are taxed at the actual cost to the employer. Cash allowances are taxed as salary.
BIK Prescribed Values 2026 (LHDN Public Ruling)
LHDN publishes prescribed values for the most common BIK categories. These values are added to your gross employment income on your EA Form.
Company Car
The car BIK is based on the vehicle's cost and whether fuel is included.
| Vehicle Cost (RM) | Annual BIK – Without Fuel (RM) | Annual BIK – With Fuel (RM) |
|---|---|---|
| Up to 50,000 | 1,200 | 2,400 |
| 50,001 – 75,000 | 2,400 | 4,800 |
| 75,001 – 100,000 | 3,600 | 7,200 |
| 100,001 – 150,000 | 5,000 | 10,000 |
| 150,001 – 200,000 | 7,000 | 14,000 |
| 200,001 – 250,000 | 9,000 | 18,000 |
| 250,001 – 350,000 | 15,000 | 30,000 |
| 350,001 – 500,000 | 20,000 | 40,000 |
| Above 500,000 | 25,000 | 50,000 |
Important: The BIK applies even if the car is used partly for personal purposes. If the employer can demonstrate that the car is used exclusively for business (mileage logs, no personal use whatsoever), the BIK may not apply — but exclusive business use is difficult to prove for senior employees. If the car is a company pool car shared among employees, the BIK does not apply.
Accommodation (Housing)
The housing BIK is 3% of the gross employment income (excluding the housing benefit itself) or the actual rent paid by the employer, whichever is lower. But for a furnished accommodation:
| Furnishing Level | Annual BIK (RM) |
|---|---|
| Basic furniture (beds, basic appliances) | 840 |
| Semi-furnished (includes dining set, sofa, TV) | 1,680 |
| Fully furnished (includes air conditioning, curtains, premium appliances) | 3,360 |
The furnishing BIK is in addition to the rent/housing BIK.
Household Furnishings, Appliances, and Equipment
If the employer provides items such as a refrigerator, washing machine, television, or air conditioner for the employee's personal residence:
| Item Category | Annual Value (RM) |
|---|---|
| Electrical goods and appliances (per item) | 180 – 840 depending on type |
| Furniture (per suite) | 420 – 2,520 depending on grade |
| Curtains and carpets | 360 – 1,200 |
Interest-Free and Subsidised Loans
If an employer lends money to an employee at no interest or at a below-market rate, the interest forgone is a taxable perquisite.
How the loan BIK is calculated
LHDN prescribes a reference interest rate — typically the Bank Negara Malaysia Overnight Policy Rate (OPR) plus a margin, or a rate set by LHDN in its annual Public Ruling. The difference between the reference rate and the rate actually charged to the employee, applied to the average loan balance during the year, is the taxable perquisite.
Example: Employer lends RM100,000 at 0% interest. LHDN reference rate is 5%. The taxable perquisite for the year is RM100,000 × 5% = RM5,000. This RM5,000 is added to the employee's gross employment income on the EA Form.
Exemptions from loan BIK
Certain loans are exempt from BIK treatment:
- Housing loan subsidy up to RM300,000: If the employer provides an interest subsidy on a housing loan not exceeding RM300,000, the subsidy is tax-exempt for the employee.
- Car loan subsidy up to RM150,000: An employer-provided car loan interest subsidy up to RM150,000 is exempt.
- Education loan: Loans for the employee's own education or their children's education are exempt from BIK.
How BIK Appears on Your EA Form
At year-end, your employer issues an EA Form showing your total employment income for the year. The EA Form has specific sections for BIK and perquisites:
- Section B: Gross salary, bonus, commission, and allowances
- Section C: Value of benefits-in-kind (car, accommodation, furnishings)
- Section D: Value of living accommodation provided
- Section E: Perquisites (loan subsidies, personal expenses paid by employer)
The total in Sections B through E forms your gross employment income, which is the starting point for your tax computation.
How BIK affects PCB
BIK increases your taxable employment income for the year, but it is not deducted monthly from your salary like EPF or SOCSO. Instead, your employer may or may not include BIK in the PCB calculation:
- Some employers include expected BIK in the monthly PCB formula, which increases your monthly PCB deduction.
- Some employers do not include BIK in monthly PCB, resulting in a tax shortfall at year-end when the BIK is added to your EA Form total.
Ask your HR or payroll department which approach they use. If BIK is not included in monthly PCB, set aside funds to cover the additional tax at filing time. Use the DuitTools PCB calculator to model different BIK scenarios.
BIK Exemptions
Not all employer-provided benefits are taxable. The following are exempt:
| Benefit | Exemption Limit |
|---|---|
| Medical and dental treatment | Fully exempt |
| Childcare subsidy | Up to RM2,400 per year |
| Parking at or near the workplace | Fully exempt |
| Meal allowance (during overtime) | Fully exempt |
| Transport allowance for official duties | Fully exempt |
| Mobile phone and internet (one line per employee) | Fully exempt |
| Professional subscriptions (required for the job) | Fully exempt |
| Staff discount (on employer's own products) | Up to RM1,000 per year |
| Gift of a personal computer | One unit, fully exempt |
| Long service award (15+ years) | Up to RM2,000 |
| Group insurance premiums | Fully exempt |
| Employer EPF contribution | Fully exempt but counted separately |
FAQ
My company car is a 5-year-old model. Is the BIK value lower?
Yes. If the vehicle is more than 5 years old, the prescribed annual BIK value is reduced to 50% of the standard value. For a car with a cost of RM120,000 that is 7 years old, the annual BIK (without fuel) would be RM2,500 (RM5,000 × 50%) instead of the full RM5,000.
I use the company car only for business. Do I still pay BIK?
If the car is kept at the employer's premises outside working hours and used only for business purposes, you may not be subject to BIK. However, LHDN requires the employer to maintain detailed records — mileage logs, a car usage policy, and evidence that personal use is prohibited. For most employees, especially those with a dedicated assigned car, partial personal use is assumed and BIK applies.
My employer pays for my personal credit card bills directly. Is this a BIK or a perquisite?
This is a perquisite — it is an employer payment of a personal liability. The full amount paid by the employer is added to your gross employment income. If your employer paid RM12,000 in credit card bills on your behalf during the year, RM12,000 is added to your taxable income.
Do I need to declare BIK myself when filing, or does the employer handle it?
The employer reports BIK and perquisites on your EA Form. You enter the EA Form's total gross employment income into your tax return. You do not need to separately identify or calculate BIK — that is the employer's responsibility. However, you should verify that the EA Form correctly reflects benefits you actually received. An overstated BIK means you pay more tax than you should.
Are stock options and share awards considered BIK?
Employee share options and share awards are taxed under separate provisions of the Income Tax Act, not under the BIK rules. Generally, the difference between the exercise price and the market value at the time of exercise is taxed as employment income in the year of exercise. The rules are complex and depend on the specific scheme structure — consult your employer's HR or a tax advisor.
What if my employer provides a driver with the company car?
A driver provided by the employer has a prescribed fixed BIK value of RM600 per month (RM7,200 per year), which is separate from and in addition to the car BIK. This covers the salary and related costs the employer incurs to provide the driver.
BIK and perquisites turn what look like free perks into taxable income — and the tax can be substantial, especially on company cars and housing. The time to understand the BIK implications of a compensation package is before you accept the offer, not when the EA Form arrives on 1 March. Ask HR: "Which of these benefits will appear on my EA Form, and what is the annual BIK value?"
To model your total tax liability including BIK, use the DuitTools PCB calculator — enter your gross salary and add expected BIK to see how it changes your monthly deductions and year-end tax position.