This is contained in Section 10 (1) (q) of the Income Tax Act).
But as we've mentioned, there's a small catch.
Study loans and bursaries will be tax free under these circumstances
Caution! For this exemption to apply, you must sign an agreement with your employee saying that he'll reimburse you if he fails to complete his studies for reasons other than death, ill health or injury.
In fact, if your employee fails to complete his studies, the exemption falls away!
Just remember that if you grant a scholarship or bursary to your employee's relative, the exemption is limited to R10 000 per year, provided your employee's remuneration doesn't exceed R100 000 for the relevant tax year.
If your employee's remuneration does exceed R100 000, then the exemption doesn't apply at all!
Don't forget that not all fringe benefits are tax free.
A fringe benefit will be taxable if you:
Well there you have it. If you gave one of your employees a study loan or bursary this January, you'll be glad to know it's tax free.
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