How to calculate BIK (Benefit-In-Kind) for PCB (MTD)

BIK is Benefits with monetary value that is not convertible into money provided to the employee which cannot be sold, assigned or exchanged for cash.

It is one of the few ways for Tax Savings, but doesn't mean that employee receiving BIK doesn't have to pay Tax for it.

A typical example is to buy a company car (RM 250,000 Mercedes Benz A Class) under the company and let the director Mr A using it for daily business needs.

While the company can have a tax saving by claiming the capital allowance (RM50,000) and deductible expenses (Insurance, road tax, Maintenance, Petrol, etc), the director (also employee of the company), may have to pay for Individual BIK Tax, for up to 10 years.

There are 2 methods to choose to calculate the Benefits to declare for BIK Tax, and the person is allow to choose either one:

1) Formula

a) Motor Car benefit = Motor Car price (250,000) / 8 years * 0.8 = RM25,000

b) Petrol benefit (actual price) = RM6000 (assuming RM500/month)

BIK to declare = RM25,000 + RM6,000 = RM31,000

2) Prescribed Method

a) Motor Car Benefit = RM9,000

b) Petrol Benefit = RM1500 (assuming RM500/month)

BIK to declare = RM9,000 + RM1,500 = RM10,500

Source: PR_11_2019.pdf (hasil.gov.my)