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Is Rental Reimbursement Scheme actual housing allowance?

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  1. #1

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    Sep 2015
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    Is Rental Reimbursement Scheme actual housing allowance?

    Hi Geo Expat,

    I'm given an offer to work in Hong Kong. As this is my first time shifting to a new city for work, I'm new to the aspects pertaining to rental allowance in the contract. As such, I would like a quick clarification on what is stated in my employment letter.

    I'm given HK$40,000 / month for my base salary. In the contract, it's written that I am eligible to participate in the Rental Reimbursement Scheme (RRS), under which I may be entitled to claim monthly reimbursement of rental payments up to HK$12,000.

    The simple question is which of the following is correct:
    1. I'm paid HK$40,000 / month and an additional HK$12,000 for rent. This can come in the form of me paying for the rent first and at the end of the month, the company pays me back that which I paid for rent.
    2. The company pays HK$12,000 for my rent but then pays me the remaining HK$28,000 at the end of the month.

    A further question would be how much of the HK$12,000 rental payments will be taxed as I know there are tax implications. But I probably should know which of 1 and 2 is correct. This is probably a common question concerning RRS but I'm new to relocating so I'm asking here.

    Thank you,
    Willy


  2. #2

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    Quote Originally Posted by willylee
    I'm given HK$40,000 / month for my base salary. In the contract, it's written that I am eligible to participate in the Rental Reimbursement Scheme (RRS), under which I may be entitled to claim monthly reimbursement of rental payments up to HK$12,000.
    I think you should ask your employer, hopefully they will know ! But looks like its 28+12. And you can deduct from your taxable income the lowest of (i) 12k and (ii) your actual rent. If my recollection is correct (I am lazy to check) if you claim under this scheme, your taxable income is increased by 10%. Or something along those lines. Or at least that was the case some years ago. You can go to the website of the IRD, they have a tax simulator.

  3. #3

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    Yup, it's 28 and 12. Oh well, looks like a small place in Hong Kong for me.


  4. #4

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    You can work out your tax here.

    Salaries Tax Computation

    If you take the housing allowance you put in 12 x 28k for your annual income and 10% of this total figure in the value of residence box so 336,000 / 33,600. Add the MPF deduction (15k). Total tax payable for the year is HKD 27,822.

    If you take the straight 40k without the housing allowance then your annual tax is HKD 46,650

    Your first HKD 120,000 per year is tax free.


  5. #5

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    Sep 2015
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    Hi Trebor,

    Yup, I did that calculation so the savings will be about HK$20,000 a year. A fair bit for a guy my age. I'll take it.

    Anyway, I got another question regarding where to rent. So, in Singapore, I'm used to taking 15 mins bus ride to the train station and then a 30 mins train right to the city and then to office.

    In Hong Kong, what's your comment on staying near the city, Austin station is the nearest, and travelling to my office at Cyberport as a daily commute?

    Rent at Cyberport will be about 1.6x as much so I'm considering the savings.

    Last edited by willylee; 16-09-2015 at 11:53 AM.

  6. #6

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    Quote Originally Posted by willylee
    Hi Trebor,

    Yup, I did that calculation so the savings will be about HK$20,000 a year. A fair bit for a guy my age. I'll take it.

    Anyway, I got another question regarding where to rent. So, in Singapore, I'm used to taking 15 mins bus ride to the train station and then a 30 mins train right to the city and then to office.

    In Hong Kong, what's your comment on staying near the city, Austin station is the nearest, and travelling to my office at Cyberport as a daily commute?

    Rent at Cyberport will be about 1.6x as much so I'm considering the savings.
    I live in Wanchai, i think i got a fairly good deal at 17k for a 2 bedroom furnished place.

    Clearly most places in TST will be cheaper although if you are working at Cyberport then I would think that either Pok Fu Lam or Ap Lei Chau would be viable options as there is currently no MTR stations at those places which reduces the rent somewhat.

    Have you checked kennedy town or Sai Ying Pun? They both have MTR stations recently opened which may have pushed rents up but there should still be some decent places to be found within your budget.

  7. #7

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    Don't ignore bus routes directly to Cyberport - buses in HK are far better, faster, more regular and more extensive than Singapore. If it were me, I would be looking at Aberdeen.

    jmbf likes this.

  8. #8

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    Quote Originally Posted by HK_Katherine
    Don't ignore bus routes directly to Cyberport - buses in HK are far better, faster, more regular and more extensive than Singapore. If it were me, I would be looking at Aberdeen.
    Good idea, but expect to put in some of your 'own money'. (Shocked to how expensive it's gotten there, and the MTR station across the way hasn't even opened yet.)
    HK_Katherine likes this.

  9. #9

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    Quote Originally Posted by HK_Katherine
    Don't ignore bus routes directly to Cyberport - buses in HK are far better, faster, more regular and more extensive than Singapore. If it were me, I would be looking at Aberdeen.
    Hi Katherine,

    Thank you for your reply. This is going to sound crazy but I'm allocating only HK$6,000 for rent. I'm a mega saver and I'm looking for this time in my career to learn and save as much for the future. After my search, Kennedy town seems out of the question.

    In Singapore, buses are good too and I use a combination of bus and trains. From what I see on Google Maps, I can either

    1) take a 30 min bus ride, 970 and 973, to Pok Fu Lam, and walk 12 min to Cyberport.
    Or
    2) 7 min train from Jordan to Central, from Pottinger Street 16 min bus ride to Cyberport Bus Terminal and then walk 3 min to Cyberport.

    Comments on either? Given my lifestyle now, 2 seems to be suited for me.

  10. #10

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    970 goes to Cyberport. Where do you get the 12-min walk from?

    Check the bus website (http://www.nwstbus.com.hk/routesearc...43&intLangID=1), or try Citymapper app, which people here are saying is accurate.

    Last edited by Claire ex-ax; 16-09-2015 at 02:23 PM.

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