Accomodation Benefit-in-Kind [FAQs]

In this section you'll find the most common Benefit-in-Kind FAQs regarding company supplied accomodation.

Accommodation Issues / Queries

Hotel Staff - Accommodation provided in the hotel or in Staff accommodation near the company premises? How is this viewed under the new arrangements?

To qualify for exemption from the benefit in kind charge the following conditions must be met:

  1. the employee must be required, by the terms of his or her employment, to live in the accommodation provided by the employer in part of the employer's business premises so that he or she can properly perform his or her duties, and either
  2. the accommodation is provided in accordance with a practice which, since before 30 July 1948, has commonly prevailed in trades of the class in question as respects employees of the class in question, or
  3. it is necessary, in the particular class of trade, for employees of the class in question to live on the premises.

Generally, hotel staff would not qualify for exemption from a benefit in kind charge. In the case of a room provided in the hotel itself, the taxable benefit should be based on the rent which the employer could reasonably expect to obtain if the property was let on an arm's length basis.

Where the accommodation consists of a house/apartment etc near the company's premises the taxable benefit may be based on 8% of the market value of the relevant property or, where documentary evidence is available to show that the rental value of the property is lower, such rental value.

Where the accommodation is furnished a taxable benefit equal to 5% of the market value of the furniture when first provided will also arise.

Where two or more employees share the accommodation provided, the taxable benefit should be apportioned.

If an employer has any doubt about the treatment of accommodation provided to staff, the relevant regional tax office should be consulted.

Where nursing staff are provided with accommodation, will this give rise to a taxable benefit?

Student nurses

Where accommodation is provided to student nurses engaged in grant funded diploma programs under the auspices of the Dept. of Health / Health Authorities, no taxable benefit arises.

All other Staff

The taxable benefit will be:

  • the annual value - 8% of the current market value of the property or
  • where documentary evidence is provided, the rent which the employer could reasonably expect to obtain if the property was let on an arm's length basis,
  • (plus 5% of the value of the furnishings when first provided, if appropriate).

Where two or more employees share the accommodation provided, the annual value (the taxable benefit) should be apportioned. The rules governing the taxable benefit arising from free accommodation are set out in Free Use of Assets (other than accommodation, company cars or vans) section of the Employer's Guide to operating PAYE and PRSI on certain benefits.

Where a room / accommodation is provided for a company manager in the company premises, in the event that he or she has to work late or has to stay over occasionally, and the employee's spouse or family members are not entitled to stay in the accommodation, does this give rise to a taxable benefit?

The provision of accommodation in such circumstances would not qualify for the exemption referred to in question 1 above. Consequently a taxable benefit arises. The employer should contact the relevant regional tax office with a view to arriving at the value of the taxable benefit.

What is the position in respect of accommodation provided to Au Pairs?

Generally, Au Pairs who are required by the terms of their employment to 'live in' and who are "on call" would qualify for the exemption referred to in question 1 above, and in such circumstances no taxable benefit would arise from the provision of accommodation. Where these circumstances do not arise there is a taxable benefit which should be calculated by reference to rent the employer might reasonably expect to get for the room if rented at arms length, plus 5% of the market value of the furniture when first provided, if appropriate.

Where a company has an existing agreement with the local tax office regarding subsidised rents for foreign employees, can this continue or do the rules set out in chapter 7 of the Employer's Guide to operating PAYE and PRSI on certain benefits apply?

Existing agreements with tax offices may no longer be valid after 31 Dec 2003 where they do not comply with the rules set out in the Employer's Guide to operating PAYE and PRSI. Employers should contact the appropriate regional tax office with a view to making new agreements where appropriate.

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Revenue Commissioners
March 2004

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