Fringe Benefits on normal tax

Pension fund contributions

By employer Not a fringe benefit and not deductible
By employee Deductible
Retirement annuity fund contributions
By employer Deductible and a fringe benefit
By employee - Deductible
Provident contributions
By employer Not a fringe benefit and not deductible
By employee Not deductible
Medical aid fund contributions
By employer Fringe benefit
Allowances
Any allowance other than travel allowance, subsistence allowance and to a public office
holder include in full
Travel allowance
Reduced by the business travel most beneficial to the taxpayer which is the higher of
o Actual expenditure
Wear and tear, Fuel, Maintenance, fixed costs
o Deemed rates
Cost scale (Value include VAT), with fixed cost apportioned for days
If the car is leased from an employee, spouse or child, rentals paid and any
expenditure in terms of the car will be an allowance not income to such employee and
will not be a right of use
No reduction if right of use is granted on the same vehicle
Subsistence allowance
Reduced by the expenditure expended most beneficial to the taxpayer which is the
higher
o Actual expenditure
Provided had proof of actual expenditure (Including VAT)
o Deemed rates
Incidental costs only R98-00
Meals and incidental costs R319-00
Reduced as long as spent a night away from usual place of residence
Reimbursed expenditure not included in gross income
Acquisition of assets at less than actual value
Trading stock at the lower of
Cost and
Market value
Right of use of sundry assets
Leased rental payments
15% of lower of cost and market value (apportion using days)
If for a major part or extended beyond useful life - cost
Right of use of a motor vehicle
3.5% of determined value
3.25% of determined value if subject to maintenance plan
Reduce cash equivalent by business travel
Payment of employees debt fringe benefit
Not a fringe benefit if membership to the body is a condition of employment

Low interest loan

Not a fringe benefit If less than R3000
Residential accommodation
Rental value is the greater of
Formula
o A = remuneration proxy
o B = R67 711
o C = 17 if less than 4 rooms or unfurnished and power not supplied, 18 if
furnished or power supplied, 19 if furnished and power supplied
o D = months of use
Rental payable by employer for such accommodation
Holiday accommodation
Hired by employer Rentals paid by employer less consideration given
Owned by employer Market related rate per day less consideration given
Contribution to benefit funds
Contribution
Benefit in respect of interest on loan
Interest at prime rate less interest actually incurred
No value if
Less than R3000 or help employee further studies
Normal tax liability
Use of sundry assets asset is assumed to be for entertainment, no input VAT is claimed
(apportion using days)
Purchased annuity = include the full annuity and exempt capital portion under paragraph 10A
Subsistence allowance
Calculate both deemed and actual costs and compare
Road accident fund payment is exempt under S 10(1)(gB)(iV)
Annuity fund contribution are before taxable capital gain
Travel allowance
Calculate actual and deemed and compare
No reduction if has a right to use of motor vehicle
No 80% if receives use of motor vehicle
Taxable capital gain
Compensation for personal injury, illness or defamation excluded under paragraph 59
Eighth schedule
Usage of a motor vehicle
The 3.5 or 3.25 is a monthly percentage
Reduce by business travel
Reduce by private usage costs if employee bares the cots (fuel rate is 1,477)
If 8C disposal has vested mention show how much vested at that time and the market value
on the day that the share has vested becomes fair value
Tax on lump sums is not added to
Foreign winnings are subject to CGT
Provisional tax
Use simple compounding if more than 18 months
18 months starts on the last day of the year of assessment