Friday, September 05, 2008

Overall 4% tax savings for employees

Employees in general can save about 4% in tax payment on their income pursuant to the tabling of the Budget 2009 last week by Prime Minister. Effective year of assessment 2008 (YA), expenses on allowance, benefits in kind and perquisites provided by employers would be given full deduction even though such benefits were not stipulated in the service contract of the employee. With this proposal, the schedular tax deduction (STD) for the monthly salary will mainly be based on the employees basic pay and not gross monthly income anymore.

Employees also enjoyed petrol and travel allowance between the home and work place of up to RM2,400 a year, adding that business travelling for official duties would also be eligible for higher benefits on the petrol and travelling allowance amounting to RM6,000 per year. Budget for 2009 also includes allowance or fees for parking, allowance or subsidies for childcare of up to RM2,400 a year, meal allowance and staff discounts of up to RM1,000 a year on company traded goods.

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