Tax - Benefits

All benefits received, as a result of employment, are taxable at the value of the benefit to the employee. The benefits should be included on the employee's payslip. The value of the benefit is included in the tax calculation only, which increases the PAYE and reduces the Net Paid.  

See this link for more information on how to setup benefit Transaction Codes.

Examples of fringe benefits include:

- board, occupation of quarters or residence, 

- use of furniture or motor vehicle. 

- Data and Airtime for use at the home or outside work premises.

- the use of or enjoyment of any other property whatsoever, tangible or intangible, including a loan, an allowance, passage benefit and any other advantage or benefit whatsoever in lieu of or in the nature of remuneration as stated above.

For tax purposes the value of the occupation or use of quarters, residence or furniture is taken to be the value to the employee.

LOAN BENEFIT

A benefit arises on the provision of a loan to an employee where the interest rate charged on the loan is less than the percentage approved by ZIMRA, which is the current LIBOR plus a set percentage. These amounts change, so seek advice on the current values.

LIBOR: London Inter Bank Offered Rate

VEHICLE BENEFIT

The vehicle benefit rates are set for each Tax Year and are based on the vehicle engine capacity of the motor vehicle being used by the employee:

Size of Vehicle Benefit (per Month)

HOUSING BENEFIT

The general tax rule is that all remuneration from the employer is taxable in the same manner as other earning or allowance.

To process the value of a benefit create a transaction code using the 'Benefit' category. When creating the benefit transaction code enter the value of the benefit if the value of the benefit is a set amount. If the value of the benefit varies from employee to employee then set the transaction code to allow 'Manual Edit'.

Belina Payroll HR includes the benefit on the payslip and includes the amount in the calculation of PAYE but if you add up the payslip you will notice that the amount is not used in the determination of net pay.

OTHER BENEFITS

As mentioned, earlier, all benefits received, as a result of employment, are taxable at the value of the benefit to the employee.

For more information see: Benefits 

Benefits, or fringe benefits, are amounts of income which are paid or payable to any person whether in cash or otherwise in respect of services rendered. These are perks that employers give to their employees over and above any financial compensation.

School fees benefit 

The cost of the fees payable.  However, in a case where the employee is a member of the teaching or non-teaching staff of the school, only half of the school fees benefit shall be brought into his gross income and this shall apply to only three of the children of the employee concerned.

Passage benefit

The cost to the employer on travels by the employee, spouse of children which are not for the purposes of the employer’s business. 

Data and Airtime for use at the home or outside work premises. The deemed benefit is pegged at 30% of the cost to the employer.

Note: There is no deemed benefit if the employer proves to the Commissioner that data and airtime was all used for the purposes of business. Records pertaining to business transactions should be kept by the employer in order for the benefit not to be taxed. 

Other Benefit - The cost to the employer is used to determine the taxable benefit.