What are Fringe Benefit Categories?
Fringe benefits are any benefits, provided to employees and people holding or deemed to hold an office, in lieu of their employment or office. Fringe benefits rules are laid out in subsidiary legislation 123.55, legal notice 125 of 2001, as amended by legal notices 76 and 102 of 2006, 101, 147 and 409 of 2007, and 292 and 336 of 2010.
The IRD (Inland Revenue Department) classifies fringe benefits in 3 distinct categories:
Use of assets (including accommodation)
Each fringe benefit category is taxed differently, hence the importance of using the correct classification when awarding and recording fringe benefits.
What are Fringe Benefit Categories used for?
Fringe Benefit Categories are used to categorize fringe benefits given to employees.
Creating a new Fringe Benefit Category
Creating a fringe benefit is a 2-part process. First, create the fringe benefit category in accordance with IRD directives, then create the Pay Item associated with that fringe benefit category which lists emolument deductions, and percentages.
To create a new fringe benefit category, click on Fringe Benefit Categories from the Main Screen, followed by the Insert icon.
Fringe benefit category code: A unique reference code for the category.
Fringe benefit category description: A description of the Fringe Benefit Category as provided by the IRD.
Once ready, click on the Save icon. Next, remember to create the Pay Item associated with the fringe benefit.
Editing existing Fringe Benefit Categories
To edit an existing category, highlight the fringe benefit category by clicking once on the respective row and click the Edit button.
Deleting Fringe Benefit Categories
To delete an existing category, highlight the fringe benefit category and click on delete.