Free or subsidised accommodation
You may provide free or subsidised accommodation to your employee as a Benefit in Kind (BIK). If you do they must pay Pay As You Earn (PAYE), Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) on this benefit.
Calculate the value of the benefit by adding:
- any costs you have paid to provide accommodation
- the estimated cost of the yearly rent that would be payable for the property.
If you cannot determine the market value of rent payable, Revenue will estimate this based on 8% of the market value of the property. Alternatively, you can get a statement from a local estate agent of the estimated rent payable. You must keep the estate agent's estimate for inspection.
You should value your property when you first provide it to your employee and review this value every year.
If you provide furniture, it is valued at 5% of its current market value. You must value it when you first provide it to your employee. If you use the estate agent's statement no extra charge is due, as the furniture is included in their statement.
Employee living on business premises
Your employee's contract may require them to live in part of your business premises. This is not a BIK. Examples include care staff in residential or respite centres, prison governors and chaplains, caretakers living on the premises, and student nurses living on a hospital campus. An employee in this case cannot be a director.
To qualify, your employee needs to live in your business premises if:
- they are on call outside of normal hours
- they are frequently called out
- the accommodation has quick access to their work
- historically, the employee has lived in their place of employment because of the nature of their employment.
Renting accommodation for an employee
You may rent accommodation for your employee. If you pay the market rate for this accommodation it is taxed as a BIK. The total benefit will be the cost of the rent less any payments the employee makes to you.
Accommodation costs paid as part of a relocation package
You may provide accommodation as part of a relocation package. This is not taxed as a BIK if the following conditions are met:
- you get approval from Revenue before making the payment
- you pay the employee for their relocation expenses
- the expenses are reasonable.
The relocation package must follow Revenue guidelines, which is published in Statement of Practice SP IT/1/91.
Accommodation plus meals at a temporary work location
Your employees may occasionally work at temporary locations. You can provide accommodation and meals instead of paying subsistence or country money. This is not a BIK if:
- it is not your employee’s private home
- you are renting the accommodation and the rent paid is a reasonable cost of accommodation for that area
- the cost of meals is a reasonable repayment of the actual cost.
You may provide free or subsidised accommodation to your employees. This is not a BIK if they are:
- student nurses completing a grant-funded diploma programme through the Department of Health
- employees that are required to live on the premises.