What are fringe benefits?
• Fringe benefits means any amount of income which is 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.

• These are advantages or benefits which are given to employees as incentives to retain their services.

• Advantage or benefit includes board, occupation of quarters or residence, or the use of furniture or motor vehicle. It also includes 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.

• Employee includes a director or a person otherwise gainfully employed.
Valuation of advantages or benefit

Occupation or use of quarters, residence or furniture – value to the employee is used to determine the taxable benefit.

Loan – Where the Loan is USD$ excess of $100. There is a benefit if the interest rate payable is less than LIBOR rate plus 5%. For Zimbabwean dollar, a benefit will arise if the amount of the loan exceeds ZWL8,000.00 and the interest rate is less than 15%.

Motor Vehicle – The cost to the employer shall be deemed to be as follows:

School fees benefit
Where the employer pays school fees for the employees’ children, the cost of the fees payable become taxable in the hands of the employee.

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 benefit covers the cost borne by the employer on travels by the employee, spouse of children which are not for the purposes of the employer’s business. This includes the cost of taking up employment or termination of employment where such costs have been previously offered to the employee.

Any other advantage or benefit
The cost to the employer is used to determine the taxable benefit.

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Disclaimer
This article was compiled by the Zimbabwe Revenue Authority for information purposes only. ZIMRA shall not accept responsibility for loss or damage arising from use of material in this article and no liability will attach to the Zimbabwe Revenue Authority.
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