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Three tax-free travel facility benefits you can give your employees

by , 14 August 2014
If you pay for your employee to go on a much needed holiday, it's a taxable fringe benefit. That means you employee has to pay 3.5% of the holiday's total value.

But just because he has to pay tax on the holiday expenses, doesn't mean he has to pay tax on all of it.

There are, in fact, three tax-free travel facility benefits you can give him...

 

Here are three tax-free travel facility benefits you can give your employee

 
1. If you pay for your employee to travel by land, sea or air as a reward, there isn't any extra tax on the travel facilities. But if your employee makes a confirmed reservation in advance he'll have to pay tax on the travel. The reason is this shows he knew you were going to 'reward' him and this suggests it isn't a true reward.
 
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2. If you offer a transport service for employees to get them to and from work, your employee doesn't have to pay fringe benefit tax.
 
3. Any travel facility you let your employee's spouse or child use is tax free if:
 
- Your employee is stationed in South Africa in a place that's further than 250km away from him main residence;
- Your employee spends more than 183 days during the year of assessment at that specific place for business; and
- The facilities you let him use are for travel between his usual place of residence and the place where he works. (Note this doesn't apply to non-residents ).
 
There you have it. Your employee travel facilities are completely tax-free in these three situations. Just ensure you don't cross the line between business and work travel or your employee will have to pay fringe benefit tax.
 

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