Benefits
Accommodation from your employer: when it is taxed and how it's valued
Last updated 16 October 2026
Free or cheap housing from your employer is taxed on the market rent plus bills it pays, less what you pay. It's tax-free if the job needs you to live on site.
If your employer gives you somewhere to live for free or below the market rent, the difference is a benefit in kind (a taxed perk). It is taxed through payroll with income tax, USC and PRSI. There is one important exception.
When it is tax-free
There is no charge if you are required to live in accommodation on part of your employer's business premises in order to do the job. That usually means you are on call outside normal hours and often called out. The accommodation is there so you can get to work quickly. Revenue gives as examples care staff in residential centres, caretakers living on the premises and student nurses living on a hospital campus. Directors can't use this exemption.
Accommodation and meals at a temporary work location, provided instead of subsistence, are also not taxed. The costs must be reasonable and it can't be your own home.
How the benefit is valued
| Situation | Taxable value |
|---|---|
| Your employer owns the property | The yearly rent a landlord would charge an unconnected tenant, plus bills your employer pays such as heat and light |
| Your employer rents it in its own name | The rent your employer pays |
| Your employer pays rent on a lease in your name | Everything it pays: this is treated like extra salary |
| The property is furnished | Add 5% a year of the furniture's value when first provided |
Whatever you pay your employer towards it comes off. The employer should be able to back up the market rent, for example with a letter from a local estate agent. They should review it every year.
An example
An employee on €40,000 in 2026 lives in an apartment the employer owns, with a market rent of €1,250 a month. The employer pays €1,800 of heating and electricity for the year, and the furniture was worth €8,000 when first provided. The employee pays the employer €500 a month.
| Market rent for the year | €15,000.00 |
| Bills paid by the employer | €1,800.00 |
| Furniture: 5% of its value | €400.00 |
| Less paid by the employee | (€6,000.00) |
| Taxable benefit | €11,200.00 |
| Extra income tax, USC and PRSI for the year | €4,490.37 |
Even taxed, the arrangement leaves this employee better off than renting the same flat privately, because the tax is a fraction of the rent saved. If you pay your employer the full market rent and your own bills, there is no benefit and no tax.
Work it out
Sources
- Revenue: Taxable employer benefits (medical insurance, shares and others) (checked 16/10/2026)
- Revenue: Tax and Duty Manual Part 05-01-01b: Benefit in kind on the provision of vehicles (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.