An employer is currently allowed to treat a long-service award to an employee (in the form of an asset) to the value of ZAR 5,000 as a no value fringe benefit. However, employers recognize long service through awards in various forms that could be considered non-cash benefits in terms of the Income Tax Act, and it is proposed that the current provisions of the Act be reviewed to consider other awards, within the same limit, granted to employees as long-service awards.
Once clarity is provided in terms of what the ‘other awards’ are likely to be we will be able to assist you in putting together a comprehensive ‘long service award’ policy that meets current legislation. We will communicate further on this issue as and when additional information is provided.