Free or subsidised accommodation

Employer-owned 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:

  • the annual market value of the rent
  • any related expenses paid by you (such as light and heat).

The market value of the rent is the amount a landlord would charge an unconnected tenant to use the property.

You must be able to show the market value you have used is reasonable. You can use a document such as a statement from a local estate agent or auctioneer as evidence. You must keep any documents for inspection.

You should value your property when you first provide it to your employee and review this value every year.

If the property is furnished, this is also a benefit-in-kind. The value of the benefit is 5% of its value when you first provided it as a benefit.

Employee living on business premises

No benefit-in-kind occurs where your employee is required to live in accommodation that is:

  • provided by you
  • on your business premises.

Your employee must need to live on the premises to perform their duties for the benefit-in-kind exemption to apply. This requirement is usually met where:

  • your employee is required to be on call outside normal hours
  • your employee is actually frequently called out
  • you provided the accommodation so your employee could access work quickly.

Qualifying examples include:

  • care staff in residential or respite centres
  • prison governors and chaplains
  • caretakers living on the premises
  • student nurses living on a hospital campus.

An employee in this case cannot be a director.

Renting accommodation for an employee

If you rent accommodation for your employee, this is a benefit-in-kind. 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

Costs provided as part of relocation package may be exempt in certain cases. See Removal and Relocation Expenses for more information.

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 benefit-in-kind if:

  • it is not your employee’s private home
  • the costs (such as rent and meals) reimbursed are reasonable.