Posted by
GaryC
18 yrs ago
Hello, can anybody help clarify how the housing allowance works?
I understand that a housing allowance must be written into my employment contract, and that my employer must have a process in place which ensures I am actualy using the allowance for the purpose of rent - eg) reimbursing me my rent up to the alloance level on provision of rental receipt.
If this is correct, is there an upper limit to the amount of money my employer can provide as an housing allowance?
My employer and I have agreed an annual salary, and I would like to write my employment contract so that some of this is paid as houing allowance. Are there any restrictions on the ratio between housing allowance and normal salary?
Thanks in advance for any feedback.
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When I worked for a large multinational (European) company, the housing allowance was not written into the contract. I just needed to submitted a copy of the rental agreement and the rent receipts along the completed company forms. I believe the allowance is capped (by Inland Revenue) at 20% of your salary.
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ltxhk
18 yrs ago
There is no official cap from IRD, but one still needs a reasonable salary in order to avoid questions. IRD is scrutinizing much more on housing, and thus it is better to write into the conract. Terminology should include Rent Refund, or otherwise IRD can treat as a cash allowance. Rental refund requires evidence of the rental such as contract, receipts etc.
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GaryC
18 yrs ago
Thanks notaclue and ltxhk, your feedback is very helpful. My salary will be over $400000 per year, and from looking around at apartments, it seems like my rent might be up to about $14,000 per month. Would that be likely to invite questions?
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