HomeHome SearchSearch MenuMenu Our productsOur products

Four unusual company car uses and how to tax them

by , 03 July 2014
You know the basics of taxing a company car. You know if your employee uses it for private travel, it becomes a taxable fringe benefit and he must pay tax of 3.5% of the car's current value.

But what you may not know is there's a grey line between certain type of private use and business use. This is where the process of taxing the car gets complicated.

Today we want to help make the whole process more black and white. So we're revealing four unusual company car scenarios and how to tax them...

*********** Advertisement ************
Put a stop to all your company car and travel allowance headaches today with this one tool
Get the answers to your biggest company car and travel allowance questions right now and avoid being hunted down by SARS for making costly mistakes.

Here's how to tax unusual uses of your company car

Scenario 1: Your employee only started to use the company car half way through the month
In this situation, you must adjust the tax amount for that first month so you employee doesn't pay for 30 days of use.
You can find a full example of how to do this here...
Scenario 2: Your employee doesn't use the company car full time
Let's say your employee goes overseas for business for half the month, this means he only used the car for two weeks that month. 
Be careful here! SARS won't allow you to try and reduce your employee's fringe benefit tax for this time. The only time you can do this is in the scenario above.
There are two more scenarios you need to know about...
*********** Top rated product  ***************
12 Taxable fringe benefits - are you taking advantage of all of them?
There are hundreds of companies out there that don't know which fringe benefits are taxable or they land up taxing the wrong percentage on them...
This kind of error could cost you thousands in penalties to SARS if it catches you out – and it will!

Scenario 3: If your employee mostly uses your company car for business travel

You can actually reduce your employee's fringe benefit tax by up to 60%, as long as he uses it MOSTLY for business travel. By 'mostly', we mean 80% or more of your employees use of the car must be for business.
In this scenario, you use the car with the highest value of private use to work out your employee's fringe benefit tax.
So there you have it: Four unusual company car use scenarios and how to tax them.

Vote article

Four unusual company car uses and how to tax them
Note: 5 of 1 vote

Related articles

Related articles

Related Products