Housing Allowance for Locals
1. It was clarified that:
* Locals are given their housing allowance net of tax
* If we roll in the housing allowance to the taxable salary of all locals, they will be disadvantaged with a tax burden that eats into their disposable income
1. It was decided that as a principle, LRH will gross up the tax in the housing allowance to the salary, so that local employees will not be worse off.
2. The estimated increase to payroll will be around 2-3%
3. GHR counselled LRH MD and HR Shared Service that although the principle is to roll up the housing allowance and tax; that doesn't mean management loses the flexibility to decide how much to roll up for each individual (unless there is strong legislation to adhere to).
Housing Allowance for Expats and GEM
1. The principle laid down in the localisation policy stays
2. As such, as of 1 Jan 2017, expats who have stayed in same location for 5 years since 1 Jan 2012, will have their housing allowance reduced to 80%. That is they pay for 20% of the housing rental & utilities.
3. From the data given, there are 4-5 expats in LRH payroll who are impacted in this exercise in 2017.
4. However, at the discretion and approval of the Executive Chairman, the amount of 'grandfathering' of these housing allowance can be adjusted.
Change in Tax Treatment
1. The principle laid down in the localisation policy stays
2. As such, as of 1 Jan 2017, expats who have stayed in same location for 5 years since 1 Jan 2012, will have their full 'net of tax' salary reduced to 80% 'net of tax'. That is, they pay 20% of the tax, and the company pays 80% of the tax.
3. As in the previous case, at the discretion of the Executive Chairman, the amount of 'grandfathering' of these tax reductions can be adjusted.