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Employee Benefits Recap

The document outlines the tax implications and allowances for employees using personal vehicles for business purposes, including fixed and variable allowances. It details how to calculate business use versus private use, the treatment of vehicle costs, and the allowances for travel, accommodation, and meals. Additionally, it discusses fringe benefits related to employee assets and the valuation of benefits provided by employers.

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5 views9 pages

Employee Benefits Recap

The document outlines the tax implications and allowances for employees using personal vehicles for business purposes, including fixed and variable allowances. It details how to calculate business use versus private use, the treatment of vehicle costs, and the allowances for travel, accommodation, and meals. Additionally, it discusses fringe benefits related to employee assets and the valuation of benefits provided by employers.

Uploaded by

kgaumaroga
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF or read online on Scribd
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ECAP EMPLOYEE! BENEFITS: ae ‘fred, Arolet) lotilowonee | ~ Fived ommount paid monthly to employees for using their persunal velicles for business purposes. > _privote vs. business use: > Lravel between home § work = private use > private use is Lovable > bravel between work velutle és brented os 0 Fringe benefit + cole: 7 the amount used for bus. purposes (s deducted from allowance © actual costs + Octual rote per km x aduuol km travelled for bus = bus portion to get octual rake per bm = (5 8(10(bDCiitA) (bo) Vehicle: Owned Wehidle _Lensed + Wear-ond- tear over F years, |- Lease prnes LIMITED be the fived LIMITED To R800 000° Cost. omnount. in deemed cost tobke + Faonce chorges LMrTED To interest | for vehicle category on R$00 C00, + fuel + fuel + Licencing + Litencing + insurance, + insurance + (repairs 4 service costs + repairs ¢ service costs = Latal em travelled 11 allowance in T= Fired allowance - Cactuol rote per mx bus. km) |! © deemed costs Steps: 1. debermine tne value of the vehicle used = > owned : volue of vehicle = onginal cos: (NCL. VAT. » leased : Cash volve poid under Lease INCL. VAT Note:-we incl. VAT becouse. the taxpayer is NOT a VAT vendor os they ove on, individual it_go to. {eemed Cost Table 4 took for borocket which Che value of vehicle falls in ‘ii,_detecmine rake per km os follows: © Ried cost, + Fuck cos fom ani dents 4 you have| to bivide. tel tolulor valuel by 10 + maintenance cost UL a allowance for T.11= Fixed allowance - (Deemed rote per lem x bus, km) ~ for cemuneration column: 2G0% + allowonce is incl. in remuneration column oF. 7 Qox » allowance) is ind. in remuneration column |! emplayer sokistied thot ot Least 807 of use oF velicle wos For bus. purposes. Nore: colculote BOTH tne octual & font ot dl aetimuletLAlNe, ealret, lL ewolnicles : ~ allowonre pad to employees based on distonce travelled for bus. purposes, = Simplified method con now also be used ~ simplified method requirements (s8(b)(ii}) allowance based on octuol distonce travelled for bus. 2 empiayee feceives no other travel allowance / reimbursement (except For parking / toll fees) = tale: sVexpoyer con choose between: ~ pctual costs ~ deemed cops = siegiitied metinad (RU, GU) iF they qualify, + perform oll € choose highest omount, ~ Sor remuneration column: + if reimoursement rate exceeds SARS prestibed cate, Une excess is Subject to employees’ tax ord incl. in, femuneration column tonic) - ale tdalnie le) wllles: ~ for trowel ollowances (56 (1)Cb) (iv) “prevents employees From Leasing Lheir personal vehicles to employers then receiving We vehicle OS Fringe benetit «iF employee Lenses vehicle to employer: rerkal paid by employer is teoted os a travel allowance > no Fringe benefit is deemed to be received Awan temele| le UUo-wnicles : — Ollowance provided to employees for accommodation, meals 4 incidental costs when they spend ot east one Night oway From usual residence for bus. purpeses 7_Uhe portion of the allowance that excteds actual /deemed costs is inc. in Ll > deemed cost: seneals 4 incidental costs /doy : RS UN “incidental case only /doy + R169 Cale: {14 Lawoble allowance = subsistence olowance - octual /deemed cost '! Note: - actual costs can be claimed if proven ~ (por 2(0) 45) of 3° schedute “when on employee acquires on nsset Cother than money) from their employer for free / ot price below morket value “value of asset = market value at dake ‘ee aquired asoet * exceptions: > movable property: iF the br specifically ocquired Ene asset to give to te , the value is the cost to er, * Grading stock : value = Lower of coat or MV 7 Mmarkekoble securities: volues HV 7 Leased ascets : if ‘ee acquires asset after Leasing iz. value™ MV. * brovery / Long service award : value ‘s vedueed by the Lesser of cost or R500, 7 Geet with NO volue: ‘Low ens housing !F: Premuneration prowy of @ does not exceed 250.000 AND Poroperty value does not exceed Rusooce AND) * @ « comected person ii Fuel [uoricants > provided bo be for ‘ers vehide “th of | Wee) lof oabiers : ~ par 2le) ¢6 of 7 schedule + Exel. residential accommodation /vehicle. ~ Une right-of-use of an asset will be deemed te be a fringe benefit if granted to ee for private use Free of charge Or For Less of tne value of such use. 7 Nolue of right -of- use: * Leased ky ‘er: vnlue = renkal paid by ér + owned by ‘er: value= 16% p.a.on Lesser of cost /MV on date of commencement of period. + Sole right of use: volue = cost ~ ight-oF- use with NO value: “when private use is incidental (minor) to er + recreational facilites at, work place. (eg. gym equipment) + equipment /machine used generally for short periods of time whereyalue of private use doesn't exceed the amount prescribed by commissioner + phone / computer mainly used for bus, + books, Lkeroture, fecordings /works of ort 7 par 206) $7 ~ Fight -oF - use OF a motor vehicle granted toan € for privote: purpases 7 Calculation steps: © Cole determined vakue: Oetermined vatue (OV) = retoil MV of vehicle + VAT ~ 16% reducing balance depreciatron for each completed 12 month period. late: ‘in competed 12 month period’ means if on eset is used for 1 year § months. only depreciation for ONE year will be ® Coe Vaiue of Private use: * Leosed vehicle sum of octuol cosp to ér + Fuel cost ® deduct bus. portion of use (por # (7) wo (ae a) ® Deduct actual costs paid by ‘ee For private use (Par +c ») - cost For Licence, maint insane) ro imen hy] cpt Amie ty! & tpotwcAlenty|: 7 par 2(c) {8 of 7% schedule = fringe benefits where meals refreshments # vouchers are provided for de for Free / ot reduced cose + VALUE + cost to @r 7M value items incl: * ments /reFreshenents in a canteen /enfetera operated by ‘er ‘menis/reFreshment 8 during bus. hours/speciat occ aserons + ments /refreshments for bus. entertainment (eg. meeting clients ~ por 2 (4) 4.4 = Fringe toenefit where accomadation is pravided to ¢e for free /reduced cost. * VALUE = rentol value ~ consideration paid by te i. property rented by es? crented from unconnected person ~ rentol value = Lower oF rental § expenses paid by ‘er ¢ (ormulo value i property owned by er //ée has interest. 7 eental yolue « formula value. Note: formula: (A-B) xC/10 » O/2 Uinere: ‘A= remuneration prowy of 2 B= R95 460 Ce 19 (deFoutt) ca '8 Cif unfurnished with power / Furnished without power ¢ at least ty rooms) 22.19 Cif Furnished with power 4 at lenst 4 rooms) ~ 0 value item: + accom inside /outside SA for work purposes + accom inside /outesde SA to a non-resident €e away From their usual residence > for period of 2yrs /Leas after dote of arrival in 6A. ~ except if: (par 4 (740) > "0 present in SA for period exceeding 90 doys in preceding (previous) YOA on > CO the excess of the Cosh equivolent over R25 000 «no. of months accom supplied. "por 2 (4) ¢ ty 9Cu) r i gk Note:

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