Does your employer pay your rent?

If so, you must remember that income tax is due on the amount at your marginal rate, including PRSI & USC.

Employers are increasingly offering this benefit to their new employees, obviously easing the burden of renting in Ireland, especially if re-locating.

As we have seen in the news recently, senior executives can also be offered accommodation packages.

Let’s clarify this further;

If your accommodation is owned or rented by your employer, the employee must pay tax on the ‘taxable benefit’ by taxing a notional amount on your salary i.e the amount it costs the employer to offer the property. This is commonly known Benefit in Kind (BIK)

For example; An employer rents a property for €2,500 per month (€30,000 per year), therefore the employee living in it benefits from paying €2,500 per month and must pay tax, PRSI & USC on this, as if it were salary.

Living on business premises

This is treated differently by Revenue and employees who are effectively ‘on call’ outside normal working hours, do not need to pay tax on this benefit.

Relocation packages

Tax reliefs for employees re-locating from overseas are available, as covered in our recent blog here