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Taxation of Benefits


The following benefits are taxable to the extent shown below:

1. FREE AND SUBSIDISED ACCOMMODATION OR HOUSING

  • The value of the benefit is equal to the open market rent of the accommodation less any payment made by the employee for the benefit.
  • Where an employer provides accommodation or housing to employees on a sharing basis, the rental benefit value shall be apportioned accordingly.
  • Where the employer owns the accommodation or housing, the rental benefit value is determined in accordance with the following schedule which is in accordance with size and location:

SCHEDULE A

Rental   Category

Floor   Area

Area   A
  Taxable Benefit / Month

(E)

Area   B
  Taxable Benefit / Month

(E)

Area   C
  Taxable Benefit / Month

(E)

  Prime   location
  3-5 bedrooms
  2-3 bathrooms
  Double garage
  Servant quarters
  Secure perimeter
  1 500 sq.m and above lot

 

250sq.m and above

 

4 607

 

3 915

 

2 740

 

 

 

 

 

  As   above, but smaller

200sq.m and above

4 145

3 524

2 465

 

 

 

 

 

  3   Bedrooms 
  2 Bathrooms 
  A garage 
  Servants quarters 
  Secure perimeter
  700 sq.m and above lot

 

150sq.m and above

 

3 686

 

3 133

 

2 193

 

 

 

 

 

  Lesser   than prime  location 
  3 Bedrooms 
  1-2 Bathrooms 
  700 sq.m and above lot

 

120sq.m and above

 

3  190

 

2 710

 

1 899

 

 

 

 

 

  2-3   Bedrooms
  1 Bathroom or shower

100sq.m and above

2 393

2 033

1 422

 

 

 

 

 

  2-3   Bedrooms
  1 Bathrooms

70-100sq.m

1 612

1 370

960

 

 

 

 

 

  2-3   Bedrooms
  1 Bathrooms

40-70sq.m

1 330

1 129

790

 

 

 

 

 

  1 Bedroom

70sq.m and above

910

773

542

 

 

 

 

 

  1 Bedroom

Under 70 sq.m

761

648

452

 

 

 

 

 

  Bedsitters

Under   70 sq.m

531

452

317

 

 

 

 

 

  Quarters

Under   70 sq.m

213

180

110

 In this schedule, the locations are designated in categories A, B, C, and are detailed as follows:

Area A: is accommodation or housing situated in the residential areas of Mbabane Municipal area, Waterford, Pine Valley, Coates Valley, Extension 6, Madonsa Township, Thomasdale and within ten kilometers from the old Mbabane/Manzini road.

Area B: is accommodation or housing situated in the residential areas of Manzini and surrounds; except Coates Valley, Extension 6, Madonsa Township and Thomasdale.

Area C: is accommodation or housing situated in the major agricultural and industrial sectors and other towns.

 2. MOTOR VEHICLE BENEFITS

The benefits are as follows:

  1. Private Use of Motor Vehicle (including aircraft)

Where the motor vehicle (or aircraft) is available for use both for work and private purposes. The formula is as follows:

 (20% x A x B/C) - D

Where:

A is the market value of the motor vehicle at the time it was first provided for the private use of the employee

B is the number of days in the year of assessment on which the motor vehicle was used or available for use for private purposes by the employee for all or part of the day

C is the number of days in the year of assessment

D is any payment made by the employee

Note the following

  • Market value of the car is the cost to the employer at the time it was first provided to the employee
  • Second Hand cars values are shown in the Auto Dealer's Guide
  • Where an employee is provided with more than one car, the taxable benefit shall be evaluated on an individual basis.
  1. Employee assisted with purchase of vehicle, as part of perks from employment

Where an employee purchases a personal vehicle with assistance from the employer as part of a benefit, the fixed allowance given towards the costs of the vehicle is a taxable benefits.

  1. Employee using personal motor vehicle on employer’s business

Where an employee uses a personal vehicle on employer’s business, the annual value of benefits are attributable to such an employee for use of the vehicle for private purposes is determined by the following formula:

A = B - ( C x D )
                  E 

Where

A is the amount to be included in taxable income

B is the car allowance received (car allowance includes all cash allowances plus market value of any free benefit i.e. free fuel)

C is the actual expenditure on fixed and running cost (net of any recoupments) or is the deemed fixed and running costs where accurate records are not kept

D is the business mileage recorded in a log book or number record; or the deemed business is mileage of 6000 km where accurate records are not kept

E is the total mileage; or deemed total mileage of 24 000 km where accurate records are not kept

Cost of motor vehicle means the costs as quoted by the manufacturer or what the purchaser paid including VAT/Sales Tax, air conditioners, radio tape, alarm and excluding finance charges (bank loan)

Deemed expenditure is determined on the following basis:

Fixed Costs: 25% of the original cost of the motor vehicle in each year

Running costs per km:

up to 1600cc

54c per km

 

1600cc to 2000cc

76c per km

 

Over 2000cc

85c per km

(The cost of the vehicle is the cost of the vehicle as quoted by the manufacturer or what the purchaser paid and any additions and accessories such as air-conditioning, radio-tape, and burglar alarm etc, excluding finance charges).

Example:

Cost of vehicle = E250 000;

Car allowance = E7000 per month; Engine capacity = 1.6cc; where the employee does not keep a log book.

B = (7000 x 12 months) = 84 000

C = (25% of 250 000) + (24 000 x 76cents) = E62 500 + E18 240 = E80 740

D = 6000 km (deemed business mileage)

E = 24 000km (deemed total mileage)

 

A (taxable benefit) = E84 000 – (E80 740 x E6 000)

                                                          E24 000

                              = E63 815

NOTE: 

The rule in (iii) only applies to the following circumstances:

  • The employee in terms of the written employment contract is required to have such a motor vehicle for the performance of employee's duties;
  • The size and type of the vehicle relates to duties to be performed in terms of the contract of employment;
  • The employee uses the motor vehicle for the employer's business;
  • The employee is required to keep a record of the millage in respect of business and private use;
  • Employee assisted with purchase of motor vehicle; as part of perks from employment

 

  1. Deemed Motor Vehicle Benefit
    Where the employee owns or leases a motor vehicle and rents it to the employer the rental paid in respect of the arrangement are deemed to be a taxable benefit to the employee

3. PROVISION OF DOMESTIC ASSISTANTS

The value of the benefit is the remuneration paid to the domestic assistant in respect of the services rendered to the employee.

(The value of this benefit is not expected to be less than the minimum wages as set out in the Wages Act or Legal Notice issued for the regulation of wages)

4. UTILITIES (ELECTRICITY, WATER, COAL, GAS)

The value of the benefit is the amount of reimbursement or discharge payable by employer for employee on utilities expenditure if separately metered. Where the utilities are not separately metered the benefit value is 10% of the housing benefit for each service.

5. CHILDREN'S EDUCATIONAL ASSISTANCE BENEFIT

The value of the benefit is the cost to the employer for providing such educational assistance. If the educational assistance is provided through an approved bursary scheme, only 50% of the total amount paid by the employer during each year of assessment shall be taxable. 

6. SOFT LOANS

If a loan is granted interest free or less than the official rate to an employee, either by the employer or a lending institution, the taxable benefit is the whole amount of interest or the difference between the official rate and the subsidized rate. 

7. MEALS, REFRESHMENTS AND ENTERTAINMENT

The value of the benefit is the cost to the employer of providing the meal, refreshment or entertainment. 

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Provisional Tax:

1st payment is due no later than 31st December

2nd payment is due no later than 30th June

3rd payment is due on receipt of Notice of Assessment after having submitted Income Tax returns


Remittance of PAYE:

No later than the 7th every month


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