JAPAN Benchmark Analysis 1. The most popular method is that the employer signs the lease and deducts certain percentage of the rent from the employee’s salary, which is income tax deductible for the employees. 2. Another popular method is to provide a fixed amount depending on the number of dependent family members living together, which is considered the employee salary and is taxable. ABC Japan currently provides the first type of housing plan to the relocated employees. In light of the current market, ABC’s maximum rent seems a little low, which may indicate it has not been adjusted in keeping with the real estate market price for a while. Raising the cap by JPY 10,000 would bring this benefit back in line with the market. The second type of housing allowance, (i.e. providing a fixed benefit amount), is more commonly used by large size companies in addition to the first housing plan for the relocated employees. Since in many cases these benefits are paid not only to relocated employees, but to all employees, the amount is not large and is around JPY 15,000 to JPY 30,000 per month depending on the number of dependants. Gift Money Most of ABC’s benefits in this category seem to be in line with the market practice. These are very traditional types of benefits that have been provided to enhance the sense of loyalty and belonging among employees. Although they have lost much of this function today, these benefits remain unchanged in most companies. ABC Japan Co. Ltd. Page B - 12