[sea_otter]

freeier - so are you saying that it's not worth using the housing allowance provision if one's expecting a full year bonus?

[PhilE]

wongjc - I suggest you start a new thread re dental costs - otherwise this one will go seriously off topic...

[freeier]

sea_otter,

no, its like this.

e.g. your monthly pay is 60000, within with housing allowance at 10000.
your taxable income wld be considered as (60000-10000)*1.1 = 55000.
i.e. 10% more of your remaining base income.

but this is just monthly consideration.
assuming 1 year, technically it shld be 50000*12*1.1 = 660000.
but if you get an additional 1 year of bonus, i.e. your consideration becomes 660000 + 60000*12*1.1 = 1452000

then you might be better off considering your original pay of 60000*24 = 144000 instead of using the housing allowance provision

[PhilE]

Oh to have that problem! A job that pays 100% bonus??? (Fin Svcs I presume?)

[ravi]

Thanks guys, guess its time to go to HR dept armed with all this useful information. If succeed in saving some money, looking forward to seeing you guys in LKF for drinks

[newbee]

Hi Guys,

I'm also in the same boat. My company is giving me a housing allowance, but it's quite substential, and I don't intend to spend it all.

Must I spend ALL of it to ensure that I can get the non taxable benefit (or the 10% of the base salary)? Or as long as is there a 90% rule or something.

Also, are bonuses in HK included as income, and taxed henceforth? I too am in the industry, and I am calculating whether indeed it is worth the move.

I understand that in New York City, bonuses are taxable at 50% (i'm assuming top bracket)? Can anyone here clarify that?

Regards;

[PDLM]

Any money that is specified as "housing allowance" but which is not spent on housing is treated just like normal income and is therefore taxed at 16.5% (for the size of income you are likely talking about).

Bonuses are no different from any other component of salary - they too are taxed at 16.5%.

[newbee]

Originally Posted by PDLM

Any money that is specified as "housing allowance" but which is not spent on housing is treated just like normal income and is therefore taxed at 16.5% (for the size of income you are likely talking about).

Bonuses are no different from any other component of salary - they too are taxed at 16.5%.

Hi PLD, Thank you so much for the help!

So, just for final clarification.

If my salary is 50k base and 25 housing. But i only use 15 for housing.

My deemed income for tax purposes is (50+(25-15)*1.10=66k

Thank you once again!!

[PDLM]

Yes, I believe that would be correct in that case, assuming that your employer keeps the records that I mentioned above.

[newbee]

Thank You!

Very much appreciated.