The rent receipt is a proof of accomodation

Accomodation provided by the employer is quite touchy ! When it comes to expense deductions, most areas are pretty staightforward. Expenses and costs, like operations, hiring, sub-contracting, bank fees, taxes: these are all standard considered costs of doing business. But there’s more scrutiny when it comes to claiming ‘domestic’ items like housing, entertainment and meals. How does this work?

Record-keeping rules all

Operating both business or personal bookkeeping, a sole proprietorship, a freelancer, a corporation, an LLC – regardless of what financials are being accounted for, accurate recordkeeping is the key to not only keeping the tax man out of one’s pocket but also making sure that there’s an actual benefit to expense deductions. The rule goes: if there’s no receipt or record, it doesn’t exist. Accurate recordkeeping is beneficial for more than just keeping a finger on the pulse of business and personal finances and making adjustments where necessary; it’s also integral to the auditing process, should that ever occur.

Is the accommodation provided by the employer tax deductible?

In other words, can an employee claim, while doing their taxes, that the sum of the rent that was paid was an expense on them? Not really. For tax purposes, an accommodation provided by the employer is not an item of benefit for the employee. If the employer has been subsidizing, whether in full or in part, the rent, or reimbursing the employee each month (or in a lump-sum), it’s not the employee’s expense to claim — it’s the business’s.

When the business is claiming an accommodation provided by the employer, they’re saying that this comes under their cost of doing business.

Keep in mind that while the tax laws of various countries differ when it comes to housing and accommodation, in general, if the individual is expecting to stay for more than a year, then regardless of whether the company or employee is paying, the accommodation provided by the employer cannot be claimed by either party. The logic goes that the employee is now no longer an independent contractor but a permanent employee. Even if the position term will be terminated 2 months after the year-period, those two months cannot be claimed.