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There's no such thing as a free meal! Or is there?

by , 13 August 2014
Food prices are constantly rising in this tough economic climate. This means any free meals your employees get are a blessing.

But if you give your employees food, they're not free! Because they still have to pay the fringe benefit tax on it.

You see the rule with taxable fringe benefits is 3.5% of the benefits'' value. So when you give your employees free food, they pay 3.5% on the monthly average cost of that food.

 

Still a cheap meal, but is there a way to feed your employees without them paying fringe benefit tax?

 
Yes! You can give your employees food without them paying fringe benefit tax 
 
Your employees won't pay fringe benefit tax on the food you provide for them if:
 
1. You supply your employees with food in a canteen, cafeteria or dining room that you pay for and run at work. Even if you hire an outside company to work in the canteen and provide the food, you still pay for it and this means it's tax free.
 
*********** Reader's choice  ***************
 
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!
 
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2. You supply the food to your employees during business hours or extended business hours or on special occasions, such as team building activities. If you give your employees food to take home with them, they pay tax on it, but this isn't true if they get it at work and eat it during working hours.
 
3. Your employee has the food or refreshments in the course of providing a meal or refreshments to any client he must entertain on your behalf. For example, if you tell your employee to take a client out for dinner to discuss his business and you pay for the meal. 
 
There you have it. Three ways to keep your employees fed without forcing them to pay fringe benefit tax.
 

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