We received a MIBCO circular stating that from 1 March 2019, all employer contributions to MIBCO will be a taxable fringe benefit in the hands of the employee. Employer contributions to a scheme or fund administered by the bargaining council for the benef
Important:
This answer is based on tax law for the year ending 28 February 2020.
Answer:
Under paragraph 2(m) of the Seventh Schedule, where the employer has made any contribution for the benefit of any employee to any bargaining council established under section 27 of the Labour Relations Act, 1995, in respect of a scheme or fund as contemplated in section 28(1)(g) of that Act, other than any payment to a pension fund or provident fund as contemplated in subparagraph (l) a taxable benefit arises. Under paragraph 12E, the cash equivalent of the value of the taxable benefit contemplated in paragraph 2(m) is the amount of any contribution or payment made by the employer in respect of a year of assessment, directly or indirectly, to any bargaining council that is established in terms of section 27 of the Labour Relations Act, 1995, in respect of a scheme or fund as contemplated in section 28(1)(g) of that Act.
You are correct, code 4584 must, according to the SARS_PAYE_BRS - PAYE Employer Reconciliation_V18 0 3, be used for “employer’s Bargaining Council contributions paid for the benefit of the employee”. According to this guide, if code 4584 is completed, then code 3833 / 3883 must be completed.