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Warning: Taxable fringe benefits could land your company in trouble if you're not careful

by , 25 September 2014
Your employees aren't the only ones who have responsibilities when it comes to taxable fringe benefits. As a business owner, you have to deal with them properly or they could land you in serious trouble with SARS.

If you just shrug that thought off and think 'how could fringe benefits land my company in trouble', we have news for you.

It's very easy to mishandle fringe benefits and trigger the wrath of SARS and all its penalties.

To help you avoid this, we're explaining exactly how taxable fringe benefits can land you in trouble so you don't make this mistake...

 

Don't make this taxable fringe benefit mistake or it'll land your company in trouble with SARS

 
If you pay your employees' PAYE over to SARS, you must do this every month. If you give your employees taxable fringe benefits, you must withhold this tax with their PAYE.
 
If you withhold the wrong amount, it won't just get your employees in trouble. It will get your company in trouble too. SARS will know you withheld this tax, so when it doesn't get the right amount or doesn't get it at all, it will penalise you.
 
You can avoid this though. Just follow this rule to accurately withhold your employee's fringe benefit tax.
 
*********** 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!
 
***************************************
 

Use this rule to accurately withhold your employee's fringe benefit tax

 
The golden rule of fringe benefit tax is 3.5% of the benefits value. What this means is your employee's tax on the benefit is 3.5% of its value. 
 
You must look at the highest value of the benefit. If the benefit is something your employee uses for business and private purposes, only withhold tax on his private use of the benefit.
 
By doing this, you can accurately workout your employee's fringe benefit tax and avoid SARS penalties. 

Recommended Product: Your Fringe Benefits Problem Solver. With 77 answers to your questions.
 


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