Fringe Benefits
- What are fringe benefits?
- Are fringe benefits taxable?
- Types and valuation of fringe benefits subject to PAYE?
- Value of fringe benefits effective as from 1st January 2014
-
A ' fringe benefit ' is any advantage in money’s worth provided to an employee in respect of or in relation to his employment.
-
Any fringe benefit an employer provides to his employee is taxable and must be included in the employee’s pay. However a payment by an employer:
-
to provide a pension or retiring allowance for the employee or his dependents;
-
to a scheme approved by the Director-General to provide against medical expenses for the employee or his dependents; does not constitute a taxable benefit
-
-
Types and valuation of fringe benefits subject to PAYE?
Fringe benefits are treated as emoluments for PAYE purposes and include housing benefit, car benefit, tax benefit, full board and lodging to expatriates or locals, personal expenses of the employee which are borne by the employer and any other advantage in money’s worth.
- Value of fringe benefits
|
Monthly Taxable Benefits (Rs) |
||
| 1. |
Car Benefit - Cylinder Capacity - Up to 1600cc 1601 to 2000cc above 2000cc |
9,500 10,750 12,000 |
| 2. |
Housing benefits – Where property is –
|
Unfurnished - 10% of employee’s total emoluments. Furnished – 15% of employee’s total emoluments. Actual Rent Paid |
| 3. |
Accommodation benefit provided by hotels – a. Full board and lodging (i) Single (ii) Married
b. Accommodation - (i) For managing and supervisory staff (ii) Other staff |
11,500 15,700
4,400
|
| 4. | Interest free loans or loans at reduced rates |
Difference between the amount of interest for the month, calculated at 2% per annum above the repo rate, prevailing at the end of that month, and the amount of interest paid by the employee in that month. |
| 5. |
Tips received by an employee from a pool managed by the employer
|
Actual amount received in the month |
| 6. |
Repayment or write-off of employees’ debt by employer |
Amount of debt repaid or written off in the month |
| 7. |
Domestic and private expenses borne by employer including utilities, wages of housemaids, school fees of children, club membership fee and any other domestic and private expenses
|
Actual amount paid for the month |
| 8. | Tax paid by the employer |
Tax benefit is arrived at by dividing the tax payable on the actual emoluments by a factor which varies according to the marginal tax rate applicable |
|
Note:-
|
||