The end of the year is here and I'm sure you'd like nothing more than to get a little something back for yourself instead of just spending a fortune on salary increases, bonus payouts, donations to charities, gifts for clients, etc. Well, you can.
I've found five little tricks you can use to make sure you get something out of your good nature.
Let's see what they are...
Finally! The difference between a company car and a travel allowance explained
Click here to see what it is
Five tricks to save money this festive season
Trick #1 - Don't donate more than 10% of your taxable income!
If you donate to a public benefit organisation (PBO) who's been approved to issue Section 18A receipts. Or if you donate to the government, you can claim a deduction on the amount you donate. But make sure the donation is only 10% of your taxable income. Anything more than that and you won't get it as a deduction in the tax year.
Trick #2 – Spoil your long service employees tax-free
Now's the perfect chance to say thank you to your employees who've been with you for a long time. Everyone likes recognition, so giving them a gift at your year-end function is just what they're looking for.
The best part is you can give them gifts that are tax-free. All you need to do is make sure the gift is worth less than R5 000.
Trick #3 - Make sure the staff party is a once-off event
This sounds a little harsh but it's not. If you have more than one staff party a year you must tax your employees on the snacks. And believe me, if your intention is to spoil your staff and you end up taxing them, it won't go down well.
This doesn't just apply to snacks. It applies to drinks and meal vouchers you give to them too.
Read on to discover the other two tricks to save money this festive season.
Two more tricks to save money this festive season
Trick #4 - Distribute 13th cheques accurately
It's always nice for employees to receive a 13th
cheque but the truth is, it's not always feasible. If you're fortunate enough to give your employees a 13th
cheque you must distribute it according to your employee's gross salary average.
You can then include these amounts in the remuneration calculation.
Trick #5 – Two legal requirements for your bonus payments
1. Your employees are legally entitled to a 13th
cheque if you've got it written in your employee contracts.
2. You also legally have to pay bonuses if it's your company practice to do so. This is even if the employee's employment contract doesn't say anything about this.
But, even if this is the case you don't always have to be on a money spending spree. Bonuses are tax deductible for the employer in the month they are paid to the employee.
So, use these five tricks this festive season and you can save your company and your employees a fortune.
Until next time
Managing Editor: Practical Tax Loose Leaf
P.s. Did you know that you can shrink a car's fringe benefit to 3.25% if you bought the car on a maintenance plan? Click to find out how to do it.