Fringe Benefits Flashcards
Value Acquisition of Asset at < actual value
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)
Value of Benefits in respect of employer-owned insurance policies
amount of premiums paid
Value of Employee’s debt
amount paid by employer
Employer’s contribution to contribution fund
Contribution to ANY retirement fund
Value of Free or cheap services
cost for employer & minimum cost of travel
No of Value Free or cheap services
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
No Value Acquisition of Asset at < actual value: Immoveable property
NOT APPLICABLE if:
1. Remuneration proxy of employee > R250 000
2. MV of property > R450 000
3. Employee and employer connected persons
Value of Medical aid contributions
Employer contribution to medical scheme
No Value Medical aid contributions
- retired due to age, illness or infirmity
- dependents of employee who died (employed at age of death; above mentioned)
Value Medical expenses paid by employer
Cost employer paid for medical expenses for employee/spouse/child/family member
No Value Medical expenses paid by employer
- Retired due to age, illness or infirmity
- Older > 65 years
- Costs paid but recovered from medical aid
Value of Right of Use Asset: Owned by employer
15% x (lower of cost or MV) x nr of days/366
Value of Right of Use Asset: Given to employee
cost of asset
Value of Right of Use Asset: Leased by employer
rent paid
Exclusions of Right of Use Asset
- used at work
- incidental private use
- Telephone/Computer (>50%) used for business
Right of Use Motor vehicle: Value of Private use
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
Right of Use Motor vehicle: Operating lease
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
Right of Use Motor vehicle: More than one vehicle used
- curate records kept of km travelled: Do calc. for both vehicles - available reductions
- No accurate records kept: Do calc. of vehicle with highest value
The formula of Right of Use Residential Accommodation
[(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
Exclusions of Right of Use Residential Accommodation
- 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
Non-applicable Right of Use Residential Accommodation
- In SA for < 90 days before coming
- To extent value > R25 000 per month
Subsidiaries (loans)
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
Travel allowances s8 (1)(b): Value of vehicle
s8 (1)(b)
Bought = Cost Price; Leased = Cash Value
Travel allowances s8 (1)(b): Fixed Cost
see Appendix for FC/total kms x 100 x days/366
Travel allowances s8 (1)(b): Rate per km in cents
Step 2 + Step 3 -> convert to R -> /100
Travel allowances s8 (1)(b): Allowance
- Allowance received - [rate per km in R x business kms]
Subsistence allowances s8 (1)(c):
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
Subsistence allowances s8 (1)(c): Deemed cost:
Meals & incidental in SA
R493 per day
1 night = 2 days
Subsistence allowances s8 (1)(c): Deemed cost:
Incidental only in SA
R152 per day
Subsistence allowances s8 (1)(c): Deemed cost:
Meals & incidental outside SA
see Appendix H
Low-interest loan
loan x (official interest rate - employer interest rate) x days/366
Value of Interest-free loans
Rate employees pay - official interest rate
No Value of Interest-free loans
Debt < R3000 & Debt that enables the employee to further their studies
Exclusions of Meals, refreshments & vouchers
supplied on-premise, on special occasions & supplied during (extended) business hours
Long-service
Reduce value of reward with lesser of or R5000
Initial period of service = 15 years; subsequent 10 years
