Audit & Accounting » Fringe benefits

Fringe benefits

Fringe benefits or not.


Medical aid

Contributions made by an employer, on behalf of an employee, to a medical aid scheme constitute a taxable fringe benefit.


Retirement funds

Employer contributions to pension funds, provident funds and retirement annuity funds constitute a taxable fringe benefit.


Bargaining Councils

Employer contributions to Bargaining Councils is a taxable fringe benefit.  If the employer makes a lump sum contribution for a number of employees, each employee is taxed on his share of the contribution.


Low-interest loans

The benefit arises on the difference in the SARS official rate of interest and that charged to the employee on loans greater than R3 000.

Study loans are excluded and loans to fund qualifying low-cost housing are excluded.


Cellphone and computers

No fringe benefit accrues through the private use of cellphones and computers provided by the employer used mainly for business purposes.


Payment of professional fees on behalf of employees

If membership of a body is a condition of employment such payment is not a taxable fringe benefit.

Other fees paid by the employer will also be tax-free if such payments largely benefit the employer.


Transfer or relocation costs

Where an employee is appointed or transferred at the insistence and expense of the employer, certain costs incurred are exempt from tax in the employee’s hands.


Residential accommodation

Housing provided to employees is generally a taxable fringe benefit, the value of which is based on the rental value of the property.

No fringe benefit arises on low-cost immovable property given to an employee or sold at less than market value if the property has a market value of less than R450 000, and the employee earns less than R250 00 per annum.



Uniforms or allowances for uniforms are taxable unless the employee is required to wear a special uniform while on duty which is clearly distinguishable from ordinary clothing.


Other fringe benefits

Fringe benefits will arise from any asset or service provided to the employee at less than its market value.