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You have three obligations when it comes to your employee's fringe benefit tax

by , 25 September 2014
If you give your employees company benefits, you need to know whether they're taxable or not. If they are, you play a big part in giving SARS its money.

In fact, you have three obligations when it comes to your employees' taxable fringe benefits. They're not huge, but if you fail to fulfil them it could result in your company incurring SARS penalties.

You can avoid this by reading on to discover what your three taxable fringe benefit obligations are...

 

Here are your three obligations when it comes to your employees' taxable fringe benefits

 
Obligation #1: Work out the tax correctly
 
Your first obligation is to correctly work out the value of your employee's taxable fringe benefit. The rule here is he must pay 3.5% of the benefits value as tax. 
 
You mustn't include your employee's business use of such a benefit in your tax calculation. For example, with a company car, your employee only pays tax on his private use of it.
 
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Obligation #2: Withhold the tax
 
If you withhold your employees' PAYE for SARS, you must do so with their fringe benefit tax too. You must withhold this AND the PAYE as it's an additional tax and not part of his normal monthly tax amount.
 
Obligation #3: Pay the tax over to SARS
 
It's a criminal act to withhold your employee's tax and not pay it to SARS. If you don't pay it, you're stealing from your employee and from SARS. 
 
Every month you must handover all your employees' taxes to SARS. If you don't SARS, will charge you serious penalties.
 
Now that you know your three obligations when it comes to your employees' taxable fringe benefits, ensure you fulfil them so you don't get in trouble.


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

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