Fill in your details below and one of our friendly consultants will call you back as soon as possible.
  • This field is for validation purposes and should be left unchanged.

Follow us on Twitter

  • RT  @Edge_Growth : In the words of our Executive Director (Jayesh Nair): "Supporting and developing #SMEs is one of the best ways to stimulat… 6 hours ago
  • RT  @TyronneNel : Full House tonight! #StartDbn Well done everyone for showing an interest https://t.co/PpKLd2iIAv 20 hours ago
  • RT  @TyronneNel : #StartDbn - “You can’t get good money from a bad VC” - Solid advice  @darlenemenzies  20 hours ago
  • RT  @TyronneNel : Looking forward to  @StartupGrindDBN  tonight! Expecting pearls of wisdom from  @justinclarke   @darlenemenzies  and  @aishapando … 20 hours ago
  • RT  @TyronneNel : Is the #Durban SME Ecosystem finally starting to rear it’s head? #StartDbn making a meaningful impact. https://t.co/d9EvDLf… 20 hours ago
  • RT  @TyronneNel : #SME Advice - Focus is probably the most important skill required by an entrepreneur, yet it is the most underrated! 1 day ago
  • - FAQ - Need help accessing finance for your small business? We did the research here: https://t.co/HzcDjiOiDz… https://t.co/uyoCgUumrk 1 day ago
  • RT  @TSiBA_Education : Are you a small entrepreneur, committed to grow your business but don't know where to start? The Annual TSiBA Accelera… 2 days ago
  • RT  @FMFSouthAfrica : 11/30 He could claim the shortfall from his gap cover policy, but, whereas previously gap cover benefits were unlimited… 2 days ago
  • - Taxable Awards - Do you reward your team for excellent performance results? Not only is it a great motivation, bu… https://t.co/LaURRQ5rEW 2 days ago
  • RT  @TyronneNel : #SME Advice - While many might question your logic, sometimes it’s important to pick a fight with authority, just to see ho… 2 days ago
  •  @kenb7   @Fin24  Do you have outstanding returns? Worried about prosecution? Read our Blog https://t.co/LKnbWpWXaw T… https://t.co/pYmZVGP5oO 3 days ago
  • RT  @so_innovate : Apply for the 2018 IV program https://t.co/ISzdFC23aD & get funding of up-to 30,000, access 2 further capital, global part… 3 days ago
  • - Monday Motivation - Up your determination and lets get through this week. #Phezulu #MondayMotivation… https://t.co/IvQ3pung2t 3 days ago
  •  @finfindeasy  This is going to be fun - I can't wait 3 days ago
  • RT  @ProcessMechanic : We have room for 50 players at the next #BizOlympiad pop-up. Only registered people will get an invitation. No busines… 4 days ago
  • RT  @finfindeasy : Entrepreneurs, don't miss out on #Durban FastTrack Event #Startupbootcamp https://t.co/dtVRk5z8X6 https://t.co/AunLKoJkBY 6 days ago
  • RT  @StimulusAfrica : The #CESAfrica 2018 training!An opportunity for creative entrepreneurs looking to turn their talent into a business. If… 6 days ago
  • On the go and needing an easy way to invoice your clients? Not only do we process your monthly books of account, we… https://t.co/HqdvzthQCB 6 days ago
  • -BUDGET SPEECH- Did you miss the Finance Ministers 2018 Budget Speech? Here's a quick summary of what was said ear… https://t.co/bvgWsOsOX8 1 week ago
 In Newsletters

Awards are often provided by employers to employees for certain acts in performing their day-to-day duties, often as a gesture of appreciation or recognition of outstanding performance.

Types of awards include:

• Performance Awards – awards provided to employees for exceeding certain performance levels
• Long-service Awards – awards provided to employees for being employed for a certain period of time considered as “long-service”
• Bravery Awards – awards provided to employees for a particular act of bravery

While awards are usually not related to specific services, they are still regarded as remuneration as defined in Schedule Four of the Act (“Remuneration is as any amount of income which is paid or is payable to any person by way of any salary, leave pay, wage, overtime pay, bonus, gratuity, commission, fee, emolument, pension, superannuation allowance, retiring allowance or stipend, whether in cash or otherwise and whether or not in respect of services rendered” paragraph 1, Schedule Four of the Act).

As such, these awards are subject to employees’ tax and the employer is required to withhold employees’ tax on payment of such awards.

The taxable value placed on awards depends on the type of award:

• In the case of a cash award, the value of the award will be the full cash value and employees’ tax should be withheld on this full value.
• In the case of a non-cash award, the value of the taxable benefit will be the open market value of the benefit received by the employee less any consideration paid by the employee for the asset (i.e. if the employee is awarded a computer with a value of R 14 000.00 and is required to pay R 4 000.00 to the employer in order to receive the award, the taxable benefit shall be R 10 000.00).

The following exceptions apply in calculating the employees’ tax due in the case of a non-cash award:

• Awards for long-service – If the employee is awarded a long-service award, the taxable benefit of the award shall be reduced by the lesser of R 5 000.00 and the value of the benefit. Note that long service in terms of Schedule Seven should at least be an unbroken period of 15 years the first time such award is granted and a 10-year unbroken period thereafter and only applies in the case of non-cash awards.
• Awards for bravery – Bravery awards are treated on a similar basis as long-service awards, however, 15 and 10-year period of unbroken employment does not apply.

Conclusion

Awards given by employers to employee are subject to employees’ tax and employers have a responsibility to withhold employees’ tax on such awards.
At Phezulu VBO we do more than just assist clients with Payroll deductions, we are your “one stop SME shop”, assisting with everything from Accounting, Business Management, BEE, Consulting, Company Registration to Payroll and Mentoring.

For more information, please visit our website or give us a call on 010 003 8558

Recommended Posts

Leave a Comment

Start typing and press Enter to search