Taxable Benefits (Perks) Screen

About the Taxable Benefits (Perks) Screen

Fringe benefits are non-cash, taxable benefits (or perks) that the employer grants the employee as an advantage of his employment. The cash equivalent of such benefits must be included in the employee's gross remuneration, and is therefore part of his Taxable Income. Fringe benefits granted to a relative of an employee must also be included in the employee's gross remuneration.

 

In most cases, you are expected to calculate the taxable value of the benefit that the employee receives and enter the taxable value on the employee's Taxable Benefits (Perks) Screen.

 

The Taxable Benefits (Perks) Screen is used to enter the taxable amount of any fringe benefit which the employee receives from the company. The amounts that are entered on this screen are included in the employee's taxable earnings when tax is calculated.

 

For R.S.A. companies the Taxable Benefits (Perks) Screen is also used to enter the amount on which Value Added Tax (VAT) must be calculated for the applicable Perks.

 

How to Access the Taxable Benefits (Perks) Screen

  1. On the Payslip Screen, click on the Taxable Benefits (Perks) Index Tab.
  2. The Routing Code PT may also be used to access an employee’s Taxable Benefits (Perks) Screen from any of the employee’s screens.

 

The figures for the current period, year-to-date excluding the current period (YTD) and year-to-date including the current period (YTD+) are displayed on this screen.

 

 

How to do Input on the Taxable Benefits (Perks) Screen

Field How do I input amounts?
TaxVal (CP) = Taxable Value for the Current Period

It is your responsibility to calculate the taxable value of the Fringe Benefit (per Pay Period) according to current Statutory Regulations and enter it on the applicable line. The total amount of the employee’s Taxable Benefits (Perks) items will be included in the Taxable Income for the period.
VAT (CP) = Value that must be used for VAT in the Current Period

In R.S.A. certain Fringe Benefits are subject to Value Added Tax (VAT) which must be paid by the company, not by the employee. When you enter one of these Fringe Benefits the cursor will move to the VAT column so that you can enter the amount which is subject to VAT according to Statutory Regulations.
Tms = Number of Times

In this column enter the number of processing periods for which the Perk, and the VAT amount, where applicable, must be taken into account.

Enter 999 if the perk must remain in effect until it is altered.
Tax Val (YTD)

The Year-to-Date excluding the Current Period value of the Perk is displayed in this field.

Tax Val (YTD+)

The Year-to-Date including the Current Period value of the Perk is displayed in this field.

 

Special Fields on the Taxable Benefits (Perks) Screen

 

 

If a Medical Aid Fringe Benefit arises, the system will automatically calculate and display the value on the Medical Aid Benefit line on the Taxable Benefits (Perks) Screen.

 

Employees Over 65 Years of Age and Medical Aid Credit

As from March 2014, the Tax Credits allowed on Medical Aid Contributions for employees who are 65 years or older, will be calculated in exactly the same manner as for employees who are younger than 65 years of age.

This means that employees who are 65 years and older:

  • Will receive the same Tax Credits as under 65 year olds,
  • Medical Aid Company Contributions will be taxed as a Fringe Benefit (unless the employee is Legally Retired), and
  • If there is ONLY a Company Contribution, then no Tax Credit will be allowed.

 

 

Payments made to registered Retirement Annuity Funds by the employee in his/her private capacity may reduce the employee’s taxable income.

 

Proof of payment must be provided for every tax year. Only amounts up to the allowable Statutory Limits will be treated as tax deductible.

 

The Private Retirement Annuities (RA) line on the Taxable Benefits (Perks) Screen is reserved for such payments.

 

Accessing Private Retirement Annuities on the Taxable Benefits (Perks) Screen

  1. Double-click in line 13.

OR

  1. Type 13 in the Routing Box on the Taxable Benefits (Perks) Screen and <Enter>.

 

The Subscreen for the entry of Private Retirement Annuities will be displayed.

  1. Enter the Reference Number of the employee’s RA policy.
  2. Enter the amount for which the employee must receive a benefit this pay period as a negative.
  3. For example, if the employee pays R595.00, enter –595.00.
  4. The negative sign is necessary because the employee’s Taxable Income must be reduced by this amount.
  5. Enter the Number of Times for which this Retirement Annuity is applicable (i.e. remaining periods in the tax year, e.g. 5).
  6. YTD Amount: This column displays the Year-to-Date amount (excluding current period).
  7. RA Clearance No: Enter the Clearance Number for the Retirement Annuity, if required. The Clearance Number is available from the company that issued the Retirement Annuity.

 

The Income Replacement Policy Fringe benefit follows the same procedure and has the same functionality as described for the Private Retirement Annuity Fringe benefit above.

 

 

The Use of Motor Vehicle field on the Taxable Benefits (Perks) Screen is disabled, as this field will automatically be calculated by the system, using the percentages on the Company Miscellaneous Screen and the Determined Value of the Company Car as entered on this screen.

 

There are 3 different types of Company Cars:

  • Company Owned Car: The car is owned by the Company and issued to an employee to use. In this scenario, there will be a Determined Car Value, that will be multiplied by 3.25% (if on Maintenance Plan) or 3.5% to get to a Cash Equivalent Value. The Cash Equivalent is multiplied by 80% or 20% to get to the Taxable Value which is reflected on IRP5 Code 3802/3852.
  • Company Car subject to Lease Agreement: The Company has the car but there is a Lease Agreement between the Company and a financial institution where the ownership of the car will be transferred to the Company at a future date. In this scenario the Company can be paying for the lease but the employee is using the car. There will be a Determined Car Value, that will be multiplied by 3.25% (if on Maintenance Plan) or 3.5% to get a Cash Equivalent Value. The Cash Equivalent is multiplied by 80% or 20% to get to the Taxable Value which is reflected on IRP5 Code 3802/3852.
  • Company Car subject to Operating Lease: These cars are owned by Car Rental companies like Avis or Budget. The Company “rents” the car for an employee. In this scenario there is NO Determined Car Value. The Lease value plus the value of fuel must be entered on the system. This value is multiplied by 80% or 20% to get to the Taxable Value which is reflected on IRP5 Code 3816/3866.

 

Taxable Benefits (Perks)Screen

The Taxable Benefits (Perks) Screen is one of the Payslip Tabs. The Use of Motor Vehicle Perks Tax Line ‘06’ will still be a total of all the Taxable values.

Click on the <Company Car> button at the bottom of the screen to access the following tabs:

  • Company Cars,
  • History, and
  • Company Car Percentage.

 

 

The Company Cars Tab is a grid-type screen that has been designed to allow for multiple Company and Lease Car transactions which then also allows for the separate reporting of these values under separate IRP5 Codes.

 

<Add>: Allows the user to add a new Company or Lease Car for the employee.

<Change>: Highlight the transaction that must be changed.

<Delete>: Highlight the transaction that must be deleted.

<Close>: Exits the screen.

 

As per the message at the bottom of this screen:

  • Enter a Determined Car Value for Company Cars, together with all other relevant information.
  • Enter a Lease Car Value for Company Cars under an Operating Lease, tick Operating Lease and complete all other relevant information.

 

The YTD values to the right of this screen will be calculated automatically by the system. When clicking on the <View Detail> button on the Travel and Co. Car Tab of the Basic Employee Information Screen, screen, the Company Cars Tab will be displayed.

 

 

The History Tab records the ‘Use of Vehicle ‘ Perks Tax value and the ‘Cash Equivalent’ value PER Company or Lease Car PER rolling 12-month cycle. Non-monthly companies will display the current month’s values as MTD and MTD+ values.

 

If the Cash Equivalent values need to be shifted around on this screen, no VIP Support Password will be necessary. This can be done for any month within this Tax Year, prior to the Current Pay Period. The system will recalculate the value for the Use of Vehicle, also recorded on the Perks Tax Screen, according to the percentage applied in that month.

When these values are changed, the YTD values on the History Tab will be compared to the YTD values stored on the Employee’s Master file, and if there is a discrepancy, it will need to be corrected before this screen can be exited.

 

If the actual YTD Cash Equivalent values need to be amended, and not just reallocated between the different Company or Lease Cars, please call VIP Support to assist with the use of the VIPSD Password.

 

 

The Company Car Percentage Tab records the percentage applied to the Company or Lease Car Cash Equivalent, PER month, to calculate the Taxable Value.

When clicking on the <View Detail> button on the TCC Screen, the Company Car Detail Screen will be displayed.

When the percentage is changed on this tab, the system will recalculate the Taxable Value for that Company or Lease Car for that specific month and the YTD values will be recalculated.

 

 

This screen is accessed by clicking on the <HS> button on the Icon Bar of the Employee Payslip Screen. The values on this screen are recalculated once the Company Car Tabs have been accessed, whether changes were made or not. These values are recorded alongside the appropriate definition:

  • Co.Car Taxable Value,
  • Lease Car Tax Value,
  • Co. Car Cash Eq, and
  • Lease Car Cash Eq.

 

Company Cars

The ‘Use of Vehicle’ PER rolling 12-month period, for all Company Cars, as found on the Company Car History Tab, are added together, and is recorded on the Employee History Screen under ‘Co. Car Taxable Value’.

The ‘Cash Equivalent’ PER rolling 12-month period, for all Company Cars, as found on the Company Car History Tab, are added together, and is recorded on the Employee History Screen under ‘Co. Car Cash Eq’.

 

Lease Cars

The ‘Use of Vehicle’ PER rolling 12-month period, for all Lease Cars, as found on the Company Car History Tab, are added together, and is recorded on the Employee History Screen under ‘Lease Car Tax Value’.

The ‘Cash Equivalent’ PER rolling 12-month period, for all Lease Cars, as found on the Company Car History Tab, are added together, and is recorded on the Employee History Screen under ‘Lease Car Cash Eq’.

 

 

The Travel and Company Car History Report (Real Number 761) indicates the Taxable Percentages used and the Tax Values for the Company and Lease Cars and for the Travel Allowances.

 

Select to print details for either:

  • Travel Allowance, or
  • Company Car.

 

Travel Allowance Report

When selecting to print Travel Allowance details, only employees with YTD+ values will be included in the report.

 

One of two selections can be made at this point:

  • Percentages for the past 12 Months:
    • This selection enables the ‘Show Earnings’ option. This will print the actual Earning value together with the corresponding Taxable value.
  • YTD Values based on Percentage taxability:
    • For both these selections, either Specific or All Travel lines can be specified for printing.

 

Company Car Report

When selecting to print Company Car details, one of three selections can be made at this point:

  • Percentages for the past 12 Months:
    • This selection enables the ‘Show Cash/Tax Values option. This option will print the Cash Equivalent and Taxable Values.
  • YTD Values based on Percentage taxability.
  • Company Car Detail.
  • This selection enables the following options (both can be selected):
    • Active Cars: Printing all Car Transactions with YTD+ Values.
    • Inactive Cars: Printing all Car Transactions with zero YTD+ Values.

 

Employee Selections

Employees can be selected per:

  • Department,
  • Pay Point,
  • Category,
  • Job Grade, and
  • All.

 

This report cannot be Consolidated nor Grouped nor can a Sort Selection be set-up on it.