HomeHome SearchSearch MenuMenu Our productsOur products

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.
 
*********** Hot off the press  ************
 
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!
 

*************************************
 
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.
 


Related articles




Related articles



Related Products



Comments
0 comments


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance



Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today



Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism



This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands



Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>