A circular has been issued amending the amount of non-cash benefits provided to employees – including vehicle, fuel allowances, housing, communication and other benefits – considered when levying PAYE tax.

Through this communiqué, which was published by the Inland Revenue Department (IRD) on Tuesday (Feb 07), the previous circular No. SEC/2022/E/05 dated December 22, 2022 has been annulled.

Accordingly, the circular has revised the value of non-cash benefit from any residence provided by the employer to 12.5% of the salary.

The value of benefit from the private use (partly) of any motor vehicle provided by the employer has been revised to Rs. 20,000 from Rs. 50,000 and Rs. 75,000 for vehicles with engine capacity over 1800cc and below 1800cc, respectively. For drivers and fuel allowances, the value has been revised to Rs. 10,000 and Rs. 20,000, respectively. 

The value of the benefit from private use of any motor vehicle used for field work, provided by the employer where an accurate record of such usage is maintained by such employer, amount of such noncash benefit will be Rs. 25 per km (irrespective of the engine capacity of the vehicle) but shall not exceed Rs.20,000 per month.

Meanwhile, when any employee is entitled to receive a payment for communication facilities under any circular, directive or regulation issued on that behalf by the Government, 25% of the cost incurred by the employer for such payment should be the value of the benefit to the employee of such payment.

SEC_2022_E_05(Rev) by Ada Derana