Accommodation Facilities: How to Calculate, Plan & Estimate Costs

Thinking about providing accommodation for your employees? It’s a great way to attract and retain top talent, especially in today’s competitive job market.

But let’s be honest—understanding the rules, costs, and best practices can be confusing.

No worries! This guide will break it all down for you in a simple, practical way. We’ll cover:

What accommodation facilities are
Why they matter for your business
How to calculate their value
The benefits you might not have considered

By the end of this article, you’ll have a clear roadmap to offering accommodation that keeps your employees happy and your business thriving. Let’s get started!

What are Accommodation Facilities?

Accommodation facilities are places that employers provide for their new or current employees to stay. This could be a house, an apartment, or even a hostel room.

Some accommodations come fully furnished, while others only have basic necessities. The main idea is that employers offer a place to live as part of the job benefits.

In Malaysia, this isn’t just a company perk—it’s something the government regulates.

The Inland Revenue Board (LHDN) has rules on how to calculate the value of these accommodations.

The way it’s assessed depends on who is receiving it—regular employees, company directors, or government staff.

Why is this important? Because it affects taxes. Employees may have to pay tax on the accommodation they receive, and employers must report it properly.

It may seem complicated, but don’t worry—we’ll explain everything step by step.

Why Accommodation Facilities Matter to Employers

Imagine one of your workers struggling with high rent or spending hours commuting every day.

If you provide accommodation, that’s one less thing for them to worry about. They’ll be less stressed, more focused, and more likely to stay with your company.

That’s good for them—and good for you! But it’s not just about making employees happy.

There’s also a practical side. If your business is in a remote area—like a plantation or a factory far from the city—housing can be a major problem for workers.

By providing a place to stay, you make their lives easier and ensure you don’t lose good employees just because of location.

In short, offering accommodation isn’t just a nice perk—it’s a smart investment for your business.

Who Can Get Accommodation Benefits?

Any employee can get accommodation benefits if the company provides them.

But the way they’re valued depends on the employee type:

Regular Employees & Managing Directors – This includes general staff and managers who don’t own a big share of the company.
Directors of Small Companies – Applies to directors in companies with 50 or fewer shareholders.
Government or Statutory Body Workers – Covers public servants and employees of agencies like PERKESO.

Each group has different rules for valuing accommodation, but the key takeaway is that you can adjust this benefit to suit your team.

Types of Accommodation Facilities

In Malaysia, many companies provide housing for their employees, especially in industries like construction, manufacturing, agriculture, and services.

These accommodations are regulated under the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446) in Peninsular Malaysia and Labuan.

The type of accommodation depends on the employer’s budget, job requirements, and legal compliance.

Worker Dormitories (Centralized Accommodation)

Worker dormitories are large buildings designed to house multiple employees in shared rooms with bunk beds, communal kitchens, and bathrooms.

These are common for foreign workers in industries like construction and manufacturing.

Employers must follow Act 446 standards for space, ventilation, and sanitation and obtain a Certificate for Accommodation from the Department of Labour (JTKSM).

On-Site Housing (Estate or Site Accommodations)

On-site housing is found in plantations, mining areas, and remote work sites.

It includes standalone houses, cabins, or modular units near the workplace.

Facilities range from basic shared rooms to more comfortable setups with air conditioning. Act 446 applies if the estate is outside city areas and over 20 hectares.

Temporary Modular or Cabin Accommodations

These portable accommodations, such as cabins or converted containers, are used at construction sites or remote projects.

Employers must provide basic facilities like electricity and water, obtain a Temporary Building Permit, and secure an Accommodation Certificate.

Company-Provided Rental Housing

Some employers rent apartments, condominiums, or landed houses for employees, especially skilled or managerial staff.

These may include amenities like air conditioning, furniture, and gym access. Such accommodations are considered a Benefit-in-Kind (BIK) for tax purposes.

Longhouses (Traditional Communal Housing)

Longhouses, found in rural areas of East Malaysia, are large communal structures where multiple families or workers live together, sharing kitchens and bathrooms.

While rare in cities, they are still used in remote industries like logging.

Shared Apartments or Condominiums

Employers in urban areas provide shared apartments or condos for mid-level staff or expatriates.

These typically have modern amenities like private bathrooms, kitchens, and access to shared facilities such as gyms and security services.

Single-Room Units or Studio Apartments

For senior employees or those needing privacy, employers may offer single-room units or studio apartments.

These are usually fully furnished with private bathrooms and kitchenettes, commonly found in major cities like Kuala Lumpur or Penang.

Some companies offer rental subsidies or charge a capped fee, such as RM100 per month per employee.

How to Calculate the Value of Accommodation Facilities

If you provide housing for your employees, the government counts it as part of their income and taxes it.

But how do you figure out the value? It depends on the type of employee. Here’s how:

Category 1: Regular Employees & Managing Directors

For most employees, compare these two amounts and pick the lower one:

The rental value of the place (based on market price or city council assessment).
30% of their gross income (salary + allowances – stock options).

Example: If an employee earns RM3,000 a month, 30% of that is RM900. If the rental value is RM800, the taxable benefit is RM800 (since it’s the lower amount).

Category 2: Directors of Small Companies

For directors in smaller, closely held companies, the taxable benefit is simply the rental value of the accommodation.

Example: If the rental value is RM1,000, that’s the taxable amount—no need to compare with salary.

Category 3: Government Employees & Special Cases

For government workers, plantation workers, and those in hostels or tax-exempt areas, the taxable benefit is 3% of their gross income.

Example: If a worker earns RM2,000 a month, 3% of that is RM60—that’s the taxable amount, even if the house is worth more.

How to Reduce Taxable Amount from Accomodation Value

The taxable amount can be reduced if:

The employee only stays there part of the year (e.g., 6 months = half the value).
The employee pays part of the rent, repairs, or utilities (subtract what they pay).
Multiple employees share the same space (split the value).

Why Offer Accommodation for Employees?

Is it worth it to provide housing for your workers? Yes! It’s not just an expense—it’s an investment because of

Happier Employees – A comfortable place to stay means less stress and better work performance.
Lower Staff Turnover – When employees have stable housing, they’re less likely to leave for another job.
Attract Better Talent – Jobseekers love extra perks. Offering accommodation can help you hire top candidates.
Tax Benefits – If structured correctly, the taxable amount is low, helping both you and your employees save money.

How to Provide Accommodation the Right Way

Thinking of offering housing? Here’s how to do it without stress:

Choose a Good Location – Find a place near work, affordable, and comfortable.
Decide What’s Included – Will it be furnished? Will utilities be covered? Keep it simple or go all out—it’s up to you!
Check the Rules – Talk to HR or an accountant to understand tax implications and stay compliant.
Communicate Clearly – Let your employees know what’s provided and how it works. Transparency builds trust.

Start small. Maybe rent a house for key staff or provide shared spaces for outstation workers. Test it out and adjust as needed!

How to Plan Cost of Accommodation

Providing accommodation doesn’t have to be expensive, but here are some costs to plan for:

Rent or Mortgage – RM500–RM2,000 per month, depending on location.
Furniture – Basic items like beds and tables cost around RM1,000–RM3,000 per unit.
Maintenance – Repairs, utilities, and upkeep may add RM200–RM500 per month.
Taxes – A small taxable amount (e.g., RM60–RM900) is added to the employee’s income.

The key is balance. Spending RM1,000 on housing to keep a great employee is cheaper than hiring and training a replacement!

Accommodation Facilities in Different Industries

Did you know that accommodation for employees can look very different depending on the type of business? Here are some common examples:

Plantations – Workers often stay in shared houses or dormitories on-site. This makes it easier for them to be close to work.
Hotels – Some hotel staff live in rooms within the hotel, which is helpful for those working late or on rotating shifts.
Factories – If the factory is in a remote area, employers may provide hostels or small apartments to reduce travel time.
Offices – In cities, companies sometimes rent apartments for key staff or expatriates to make commuting easier.

No matter the industry, the goal is to provide accommodation that meets employees' needs and makes their work life more comfortable.

Conclusion

Finding good workers, keeping them happy, and staying ahead of the competition can be a real challenge.

But one simple way to make things easier is by providing accommodation for your employees.

A place to stay isn’t just about having a roof over their heads—it gives them security, comfort, and a reason to stay loyal to your company.

Why not consider it? Whether it’s a shared dorm for factory workers or a comfortable apartment for your managers, this benefit can make a big difference.

And if you’re hiring, don’t stop there—post your jobs on Maukerja or Ricebowl to reach over 6 million job seekers in Malaysia. Your next great employee is out there—start hiring today!