---
title: "What Are Perquisites in Salary? Meaning & Tax"
url: https://www.wisemonk.io/glossary/what-are-perquisites
lang: en
---

[All Terms](https://www.wisemonk.io/glossary)

Share this blog

# What are perquisites?

[Add us as a preferred source](https://www.google.com/preferences/source?q=wisemonk.io)

Employer of Record

Starting from

$99 per employee/ month

[Talk to an Expert](https://www.wisemonk.io/contact)

[G2 High Performer Summer 2026](https://www.g2.com/products/wisemonk/reviews) [G2 Best Results Summer 2026](https://www.g2.com/products/wisemonk/reviews) [G2 Users Love Us](https://www.g2.com/products/wisemonk/reviews)

**Perquisites, often called perks, are non-cash benefits an employer provides to an employee in addition to salary, and in India they are generally taxable as part of income from salary.** They range from a company car to rent-free accommodation to interest-free loans. Because the income tax rules assign a taxable value to most perquisites, they affect both how a salary package is designed and how much tax an employee pays, which makes them an important part of compensation planning.

## What counts as a perquisite?

Perquisites are benefits in kind rather than direct pay. Common examples include the following.

- **Accommodation:** rent-free or concessional housing provided by the employer.
- **Company car:** a vehicle provided for personal use, or a driver.
- **Loans and benefits:** interest-free or low-interest loans, club memberships, or subsidized services.
- **Stock-based benefits:** the value of shares allotted under employee stock plans can be treated as a perquisite when they vest.

## How are perquisites taxed?

Most perquisites are taxable in the employee's hands, with the income tax rules setting out how to value each type. The general approach is as follows.

- **Assigned value:** each perquisite is given a taxable value based on prescribed rules, not always its market cost.
- **Added to salary:** that value is added to the employee's taxable salary and taxed at their slab rate.
- **Some exemptions:** certain benefits are exempt or concessionally taxed within limits, such as some medical or travel-related perks.

## Perquisites vs allowances vs reimbursements

Perquisites are one of three ways employers add value beyond basic salary. The distinction affects how each is taxed.

| Type | What it is | Typical tax |
| --- | --- | --- |
| Perquisite | Non-cash benefit | Usually taxable |
| Allowance | Cash for a purpose | Taxable unless exempt |
| Reimbursement | Repayment of an expense | Often not taxable |

*This information is for general guidance. Confirm current rules and consult tax experts for your specific situation.*

### Ready to build your India team?

Talk to our experts about compliant hiring, payroll, and EOR in India, with transparent costs and no local entity required.

[Talk to an Expert](https://www.wisemonk.io/contact)

Share this blog

## Ready to build your India team?

Tell us who you're looking to hire. We'll walk you through exactly how the setup works for your company, your timeline, and your budget.

[Talk to an Expert](https://www.wisemonk.io/contact) [Get Started](https://hire.wisemonk.io/)