Fringe Benefits

Question 1

Value Acquisition of Asset at < actual value

Answer 1

MV (excl. VAT) on date of acquisition by the employee EXCEPT:
Trading stock = lower of Cost or MV
Moveable property acquired to sell to employee = @ cost to employer (excl. VAT)

Question 2

Value of Benefits in respect of employer-owned insurance policies

Answer 2

amount of premiums paid

Question 3

Value of Employee’s debt

Answer 3

amount paid by employer

Question 4

Employer’s contribution to contribution fund

Answer 4

Contribution to ANY retirement fund

Question 5

Value of Free or cheap services

Answer 5

cost for employer & minimum cost of travel

Question 6

No of Value Free or cheap services

Answer 6

No VALUE:
- Transport of employees from home -> work (vice versa)
- Travel for spouse/minor child to see employee if employee is away > 183 days or > 250km from home

Question 7

No Value Acquisition of Asset at < actual value: Immoveable property

Answer 7

NOT APPLICABLE if:
1. Remuneration proxy of employee > R250 000
2. MV of property > R450 000
3. Employee and employer connected persons

Question 8

Value of Medical aid contributions

Answer 8

Employer contribution to medical scheme

Question 9

No Value Medical aid contributions

Answer 9

• retired due to age, illness or infirmity
• dependents of employee who died (employed at age of death; above mentioned)

Question 10

Value Medical expenses paid by employer

Answer 10

Cost employer paid for medical expenses for employee/spouse/child/family member

Question 11

No Value Medical expenses paid by employer

Answer 11

• Retired due to age, illness or infirmity
• Older > 65 years
• Costs paid but recovered from medical aid

Question 12

Value of Right of Use Asset: Owned by employer

Answer 12

15% x (lower of cost or MV) x nr of days/366

Question 13

Value of Right of Use Asset: Given to employee

Answer 13

cost of asset

Question 14

Value of Right of Use Asset: Leased by employer

Answer 14

rent paid

Question 15

Exclusions of Right of Use Asset

Answer 15

• used at work
• incidental private use
• Telephone/Computer (>50%) used for business

Question 16

Right of Use Motor vehicle: Value of Private use

Answer 16

Retail MV - (15% x MV x years completed) x 3.5%(Motor without maintenance plan) OR 3.25%(Motor with maintenance plan) x nr of months

Question 17

Right of Use Motor vehicle: Operating lease

Answer 17

Reduce VALUE with following:
- par 7(7) if logbook is kept: (Value calculated above x business kms/ total kms)
- par 7(8) if employee paid for fuel, insurance & maintenance: (N/A to motor under operating lease)
- (cost of insurance, license, maintenance) x private kms/ total kms
- cost of fuel: Private kms x rate in Appendix C/ fixed rate

Question 18

Right of Use Motor vehicle: More than one vehicle used

Answer 18

• curate records kept of km travelled: Do calc. for both vehicles - available reductions
• No accurate records kept: Do calc. of vehicle with highest value

Question 19

The formula of Right of Use Residential Accommodation

Answer 19

[(A - B) x C/100 x D/12]
- A = Remuneration proxy
- B = Rebate of R91 250, but if option to buy or own private company -> B = 0
- C = 19 -> House with 4 rooms (at least), electricity & furnished
- C = 18 -> House with 4 rooms (at least), electricity OR furnished
- C = 17 -> all other circumstances
- D = Nr of months entitled to accommodation

Question 20

Exclusions of Right of Use Residential Accommodation

Answer 20

• Employee away from usual residence for work purposes
• Non-employee away from usual residence outside SA
• For , 2 years after arrival in SA OR for < 90 days in YOA

Question 21

Non-applicable Right of Use Residential Accommodation

Answer 21

• In SA for < 90 days before coming
• To extent value > R25 000 per month

Question 22

Subsidiaries (loans)

Answer 22

Capital: Amount paid by employer
Interest: Interest paid (employer) + interest paid (employee)
< or = Official rate: Interest @ official rate - Interest paid by employee
> Official rate: $ paid by employer

Question 23

Travel allowances s8 (1)(b): Value of vehicle

Answer 23

s8 (1)(b)
Bought = Cost Price; Leased = Cash Value

Question 24

Travel allowances s8 (1)(b): Fixed Cost

Answer 24

see Appendix for FC/total kms x 100 x days/366

Question 25

Travel allowances s8 (1)(b): Rate per km in cents

Answer 25

Step 2 + Step 3 -> convert to R -> /100

Question 26

Travel allowances s8 (1)(b): Allowance

Answer 26

5. Allowance received - [rate per km in R x business kms]

Question 27

Subsistence allowances s8 (1)(c):

Answer 27

When employee has to spend at least 1 night away from his usual residence in SA for business purposes
Subsistence allowance less greater of deemed or actual cost

Question 28

Subsistence allowances s8 (1)(c): Deemed cost:
Meals & incidental in SA

Answer 28

R493 per day
1 night = 2 days

Question 29

Subsistence allowances s8 (1)(c): Deemed cost:
Incidental only in SA

Answer 29

R152 per day

Question 30

Subsistence allowances s8 (1)(c): Deemed cost:
Meals & incidental outside SA

Answer 30

see Appendix H

Question 31

Low-interest loan

Answer 31

loan x (official interest rate - employer interest rate) x days/366

Question 32

Value of Interest-free loans

Answer 32

Rate employees pay - official interest rate

Question 33

No Value of Interest-free loans

Answer 33

Debt < R3000 & Debt that enables the employee to further their studies

Question 34

Exclusions of Meals, refreshments & vouchers

Answer 34

supplied on-premise, on special occasions & supplied during (extended) business hours

Question 35

Long-service

Answer 35

Reduce value of reward with lesser of or R5000
Initial period of service = 15 years; subsequent 10 years