Filing tax return - rental reimbursement

[Beanieskis]

Yes, actual monies received. I’ve not heard of a company that does it that way.

[Shiojiri Hiro]

thats very weird cos then you are effectively being penalised for tax savings/company is paying out less

[Flapster]

thats very weird cos then you are effectively being penalised for tax savings/company is paying out less

Yep... welcome to my company's policies

[freeier]

Sadly more complicated by my employer, as they pay bonuses based on your post-rent reduction salary. So you need to run multiple permutations to figure out the situation if they award 1 month, 2 month, 3 month or more bonuses, and then take a guess as to how the business will perform over the year.

I assume most other companies pay bonuses based on the actual monies received, not notional salary?

so you are saying they fixed the number of month bonus for everyone ? then regardless how much your base pay is they just pay out that same number of months to everyone ?

[Flapster]

so you are saying they fixed the number of month bonus for everyone ? then regardless how much your base pay is they just pay out that same number of months to everyone ?

For back-office staff (finance, IT), yes. More senior staff then have a share of the executive bonus pool too.

[RobRoy]

Yep... welcome to my company's policies

I assume you are looking for a new job?

[redslert]

You can always do the calculation when submitting online to IRD.
Just do the rental claim with work and then figure it out later in the final submission.

[mangohkd]

One should claim the rent deduction if the difference between the yearly rent and RV is < 100K. RV is added to your income. Rent expense is an absolute 100K deduction.

So, if your yearly rent is say 200K and RV 150K, you are still to gain if you do not opt for Rental reimbursement.

So, If you opt for Rental Reimbursement, your total taxable income after deductions will look like:

Income - 1500000
RV - 150000
Total - 1650000 (A)

Deductions
MPF -18000
Voluntary MPF - 60000
Rent Expense - Nil
Total Deductions - 78000 (B)

Total taxable income before allowances (A-B) = 1572000

If you do not claim rental reimbursement
Income - 1700000 (150000+ 200000 yearly rent)
RV - NIL
Total - 1700000 (A)

Deductions
MPF -18000
Voluntary MPF - 60000
Rent Expense - 100000
Total Deductions - 178000 (B)

Total taxable income before allowances (A-B) = 1522000

Given the rents, this may not work everyone.

The way I looked into it for myself:

1-is your rent over the tax year <$100k? If so, this is better
If not, should consider rental reimbursement.

2-Is the 10% RV of your 'net' income >$100k? Then rental reimbursement is better.

I stopped here as rental reimbursement was clearly better for me. There will be some marginal cases that are impacted by family sizes etc. In which case you should just run a quick test. the IRD calculator for 22/23 is very clear and easy to use:

https://www.ird.gov.hk/eng/ese/st_co...get/stcfrm.htm