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Convert part of basic salary to allowance

Tan Mei Ling
Member
Mon, 07 May 2012 01:37:08 PM  (Last updated: Tue, 08 May 2012 09:03:19 AM)

Hi,

I would like to clarify whether it is possible to convert part of the employees salary to allowances (i.e. Petrol & Handphone) that are exempted from tax as announced by IRB.

Thank you for your reply.

Debbie Tan

KL Siew
Administrator
Mon, 07 May 2012 05:05:15 PM

Will the employees concerned agree to that? If I were the employee, I will not agree to have part of my salary converted to such allowances. I would rather pay tax than to risk the allowances taken away by the employer one day.

Tan Mei Ling
Member
Tue, 08 May 2012 08:50:01 AM
Originally posted by KL Siew on Mon, 07 May 2012 05:05:15 PM

Will the employees concerned agree to that? If I were the employee, I will not agree to have part of my salary converted to such allowances. I would rather pay tax than to risk the allowances taken away by the employer one day.

Hi Mr. Siew,

Thank you for your quick respond.

I have verbally checked with the employees and they are willing to accept the changes since they don't have to pay extra tax.

My concern here is whether there will be any impact to the company if we exercise this?

Thank you for your advice.

Debbie Tan

 

 

 

KL Siew
Administrator
Tue, 08 May 2012 09:03:19 AM

I really cannot comment anymore. Consult the Income Tax Department and find out the actual position of the tax exempt for the two items first before implementing it.

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