{"id":2310,"date":"2024-06-04T14:04:35","date_gmt":"2024-06-04T06:04:35","guid":{"rendered":"https:\/\/ehluar.com\/main\/?p=2310"},"modified":"2025-08-18T14:09:55","modified_gmt":"2025-08-18T06:09:55","slug":"calculation-method-for-taxable-interest-benefits-on-director-loans","status":"publish","type":"post","link":"http:\/\/ehluar.com\/main\/2024\/06\/04\/calculation-method-for-taxable-interest-benefits-on-director-loans\/","title":{"rendered":"Calculation Method for Taxable Interest Benefits on Director Loans"},"content":{"rendered":"\n

The Inland Revenue Authority of Singapore (IRAS) has issued updated guidance on the tax treatment of interest-free or subsidised loans provided to company directors, effective for Year of Assessment (YA) 2024.<\/p>\n\n\n\n

Key Change: New Benchmark Interest Rate<\/strong>
With effect from 1 April 2023, the method for calculating the taxable value of interest benefits conferred on directors through such loans has been revised. Employers must now compute this benefit using a benchmark rate comprising:<\/p>\n\n\n\n

    \n
  1. 1.5%<\/em> plus<\/li>\n\n\n\n
  2. The 3-month Compounded Singapore Overnight Rate Average (SORA)<\/em>, as published by the Monetary Authority of Singapore (MAS).<\/li>\n<\/ol>\n\n\n\n

    Rate Application Periods & Examples<\/strong><\/p>\n\n\n\n

      \n
    • The relevant SORA rates are fixed semi-annually based on MAS publications on 1 March<\/em> and 1 September<\/em> each year.<\/li>\n\n\n\n
    • For 1 April 2023 to 30 September 2023<\/em>: The rate is 4.7%<\/em><\/strong> (1.5% + 3.2% SORA published 1 March 2023).<\/li>\n\n\n\n
    • For 1 October 2023 to 31 March 2024<\/em>: The rate is 5.1%<\/strong> <\/em>(1.5% + 3.6% SORA published 1 September 2023).<\/li>\n<\/ul>\n\n\n\n

      Calculation Methodology<\/strong><\/p>\n\n\n\n

        \n
      1. Monthly Basis:<\/strong> The interest benefit is calculated monthly.<\/li>\n\n\n\n
      2. Formula:<\/strong> (Applicable Annual Rate \/ 12) * Loan Outstanding at Month-End<\/code><\/li>\n\n\n\n
      3. Subsidised Loans:<\/strong> If the director pays interest at a subsidised rate (below the benchmark), the taxable benefit is the difference between the computed benchmark benefit and the actual interest paid by the director.<\/li>\n<\/ol>\n\n\n\n

        Employers are responsible for accurately calculating the monthly taxable interest benefit using the prescribed rates and methodology for any relevant loans outstanding on or after 1 April 2023. This amount constitutes a taxable employment benefit for the director.<\/p>\n\n\n\n

        Source:<\/strong> IRAS, 30 May 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"

        The Inland Revenue Authority of Singapore (IRAS) has issued updated guidance on the tax treatment of interest-free or subsidised loans provided to company directors, effective for Year of Assessment (YA) 2024. Key Change: New Benchmark Interest RateWith effect from 1 April 2023, the method for calculating the taxable value of interest benefits conferred on directors […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,13,12,18,8,6],"tags":[],"class_list":["post-2310","post","type-post","status-publish","format-standard","hentry","category-accounting","category-auditing","category-company-law","category-employment","category-incometax","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=2310"}],"version-history":[{"count":1,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2310\/revisions"}],"predecessor-version":[{"id":2311,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2310\/revisions\/2311"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=2310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=2310"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=2310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}