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Did you know: You don't have to withhold employees' tax when it comes to these five benefits?

by , 16 July 2014
When it comes to fringe benefits, your payroll must withhold and deduct the correct amount of employees' tax. If you fail to do this, you'll face SARS penalties.

That said, there are certain perks you can give your employees tax free. This means you can provide these perks and not have to worry about withholding employees' tax and SARS penalties.

Here are the five tax-free benefits you should know about.

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You don't have to withhold employees' tax when it comes to these five benefits

You don't have to withhold employees' tax when:

#1: The private use of the asset is incidental to its business use (i.e. your employee uses the asset for personal reasons once in a blue moon);

#2: You provide your employees with the asset as an amenity or for recreational purposes;

#3: The asset consists of any equipment or machine you allow your employees to use in general from time to time and for short periods.

For example, you give Simphiwe a laptop to use for business purposes. The agreement is she'll return it to the company if she leaves your employ. Simphiwe uses the laptop for personal purposes such as paying bills online and sending and receiving personal emails.

In this case, you don't have to tax her.

The reason?

Because the personal use of a computer is tax free if your employee mainly uses it for business purposes.

#4: The asset consists of books, literature, recordings or works of art;

#5: The asset consists of telephone or computer equipment which the employee uses mainly for your business.

There you have it: If you give your employees any of these benefits, don't withhold employees' tax – these benefits are tax free!

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