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Uprooting your employee? Don't worry; she won't have to pay tax on the transfer costs

by , 15 August 2014
There's a certain amount of employer guilt that can come with relocating your employee. You're forcing her to leave everything she knows and loves.

That guilt can get even worse if she has to pay fringe benefit tax on those relocation expenses you paid for.

But don't worry; you can clear your conscience of that becuase that transfer or relocation costs are 100% tax-free.

Here's what you need to know...


If you relocate your employee, she won't pay tax on the transfer costs

If you transfer your employee, for example from Johannesburg to Cape Town, you'll have to pay the expenses for this move. These include her travel down there, temporary accommodation and furniture moving costs.
Normally, when you pay for travel costs for your employee, she'll pay fringe benefit tax. But because this travel is because of her job, you can cover all the expenses and she won't pay any extra tax.
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Here's exactly what you can pay for without triggering fringe benefit tax
You can pay for:
1. The cost of transporting you employee, her immediate family members and her personal belongings from her previous home to her new one.
2. Any costs your employee incurred when she sold her home and settled into her new home. SARS will determine which of these costs are tax-free.
3. You can pay for your employee and her family members to stay in a temporary residence, such as a hotel or flat. You can only do this for up to 183 days after your employee took up her new appointment while waiting to find a new permanent home.
There you have it. Now you can ease that guilt you may feel at relocating your employee by paying for all the necessary expenses.

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