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Tax Benefit

A tax benefit is something of value you give an employee that is not money — for example, a company car, free accommodation, or a company phone they also use personally. Even though it isn't cash, the tax rules treat its value as part of the employee's income, so it has to be counted when working out their tax.

When to use it​

Use it to enter the value of any non-money benefit an employee receives, so their tax is worked out correctly.

How to add it​

  1. In the menu, go to Payroll → Payroll Items → Tax Benefit.
  2. Choose the employee.
  3. Select the type of benefit and enter its value for the period.
  4. Click Save.

The value is added to the employee's taxable income, which may increase their tax — but it is not paid to them as cash.

note

Because it is not cash, a tax benefit increases the amount of tax worked out, without adding to the employee's take-home pay. It also appears on year-end forms such as the EA Form.

tip

If you are unsure how to value a particular benefit, check the current guidance from the tax authority or ask your accountant.