Eswatini Revenue Service

Taxation of Benefits

The following benefits are taxable to the extent shown below:

1. FREE AND SUBSIDISED ACCOMMODATION OR HOUSING

The value of the benefit is equal to the open market rent of the accommodation less any payment made by the employee for the benefit.
Where an employer provides accommodation or housing to employees on a sharing basis, the rental benefit value shall be apportioned accordingly.
Where the employer owns the accommodation or housing, the rental benefit value is determined in accordance with the following schedule which is in accordance with size and location:

SCHEDULE A

Rental Category	Floor Area	Area A Taxable Benefit / Month (E)	Area B Taxable Benefit / Month (E)	Area C Taxable Benefit / Month (E)
Prime location 3-5 bedrooms 2-3 bathrooms Double garage Servant quarters Secure perimeter 1 500 sq.m and above lot	250sq.m and above	4 607	3 915	2 740

As above, but smaller	200sq.m and above	4 145	3 524	2 465

3 Bedrooms 2 Bathrooms A garage Servants quarters Secure perimeter 700 sq.m and above lot	150sq.m and above	3 686	3 133	2 193

Lesser than prime location 3 Bedrooms 1-2 Bathrooms 700 sq.m and above lot	120sq.m and above	3 190	2 710	1 899

2-3 Bedrooms 1 Bathroom or shower	100sq.m and above	2 393	2 033	1 422

2-3 Bedrooms 1 Bathrooms	70-100sq.m	1 612	1 370	960

2-3 Bedrooms 1 Bathrooms	40-70sq.m	1 330	1 129	790

1 Bedroom	70sq.m and above	910	773	542

1 Bedroom	Under 70 sq.m	761	648	452

Bedsitters	Under 70 sq.m	531	452	317

Quarters	Under 70 sq.m	213	180	110

In this schedule, the locations are designated in categories A, B, C, and are detailed as follows:

Area A: is accommodation or housing situated in the residential areas of Mbabane Municipal area, Waterford, Pine Valley, Coates Valley, Extension 6, Madonsa Township, Thomasdale and within ten kilometres from the old Mbabane/Manzini road.

Area B: is accommodation or housing situated in the residential areas of Manzini and surrounds; except Coates Valley, Extension 6, Madonsa Township and Thomasdale.

Area C: is accommodation or housing situated in the major agricultural and industrial sectors and other towns.

2. MOTOR VEHICLE BENEFITS

The benefits are as follows:

Private Use of Motor Vehicle (including aircraft)

Where the motor vehicle (or aircraft) is available for use both for work and private purposes. The formula is as follows:

(20% x A x B/C) - D

Where:

A is the market value of the motor vehicle at the time it was first provided for the private use of the employee

B is the number of days in the year of assessment on which the motor vehicle was used or available for use for private purposes by the employee for all or part of the day

C is the number of days in the year of assessment

D is any payment made by the employee

Note the following

Market value of the car is the cost to the employer at the time it was first provided to the employee
Second Hand cars values are shown in the Auto Dealer's Guide
Where an employee is provided with more than one car, the taxable benefit shall be evaluated on an individual basis.

Employee using personal motor vehicle on employer's business

A = B - ( C x D )
E

Where

A is the amount to be included in taxable income

B is the car allowance received (car allowance includes all cash allowances plus market value of any free benefit i.e. free fuel)

C is the actual expenditure on fixed and running cost (net of any recoupments) or is the deemed fixed and running costs where accurate records are not kept

D is the business mileage recorded in a log book or number record; or the deemed business is mileage of 6000 km where accurate records are not kept

E is the total mileage; or deemed total mileage of 24 000 km where accurate records are not kept

Cost of motor vehicle means the costs as quoted by the manufacturer or what the purchaser paid including VAT/Sales Tax, air conditioners, radio tape, alarm and excluding finance charges(bank loan)

Deemed expenditure is determined on the following basis:

Fixed Costs: 25% of the original cost of the motor vehicle in each year

Running costs per km:	up to 1600cc	54c per km
	1600cc to 2000cc	76c per km
	Over 2000cc	85c per km

The rule does not apply to the following circumstances:

The employee in terms of the written employment contract is required to 1. FREE AND SUBSIDISED ACCOMMODATION OR HOUSINGhave such a motor vehicle for the performance of employee's duties.
The size and type relates to duties to be performed in terms of the contract of employment
The employee uses the motor vehicle for the employer's business.
The employee is required to keep a record of the millage in respect of business and private use.
Employee assisted with purchase of motor vehicle; as part of perks from employment

Where an employee purchases a personal vehicle with the assistance from the employer as part of the benefit or advantage accruing by way of employment, the fixed allowance given toward the cost of the vehicle are taxable.

Deemed Motor Vehicle Benefit
Where the employee owns or leases a motor vehicle and rents it to the employer the rental paid in respect of the arrangement are deemed to be a taxable benefit to the employee

3. UTILITIES (ELECTRICITY, WATER, COAL, GAS)

The value of the benefit is the amount of reimbursement or discharge payable by employer for employee on utilities expenditure if separately metered. Where the utilities are not separately metered the benefit value is 10% of the housing benefit for each service.

4. CHILDREN'S EDUCATIONAL ASSISTANCE BENEFIT

The value of the benefit is the cost to the employer for providing such educational assistance. If the educational assistance is provided through an approved bursary scheme, only 50% of the total amount paid by the employer during each year of assessment shall be taxable.

5. SOFT LOANS

If a loan is granted interest free or less than the official rate to an employee, either by the employer or a lending institution, the taxable benefit is the whole amount of interest or the difference between the official rate and the subsidised ate.

6. MEALS, REFRESHMENTS AND ENTERTAINMENT

The value of the benefit is the cost to the employer of providing the meal, refreshment or entertainment.

7. DEBT WAIVERS

The value of such a benefit is the repaid amount where the employer undertakes on behalf of the employee to repay to a person or the employer an amount owed by the employee.

8. PROPERTY TRANSFERS

The value of the benefit is the market value reduced by any payment made by the employee for the benefit.

9. MEDICAL AID

Where an employer‘s contribution towards employee medical aid scheme exceeds 66.67% - or 2/3, the excess thereof shall be taxable.

10. ALLOWANCES

Any amount of cash paid by an employer to an employee as an allowance is taxable in the hands of the employee. It forms part of what the employee is paid for the services being rendered to the employer.

11. RE-IMBURSIVE ALLOWANCES

Where the employer pays an employee an allowance prior, in respect of expenses for travelling, entertainment or other service and is not expended for the official purpose, it is regarded as a taxable benefit to the employee. The taxable value is calculated as the difference between the actual amount paid and the justifiable official expense incurred by the employee.

Where the employer reimburses the employee expenses whilst travelling, entertaining or other service on duty and the precise amount of such expenditure is paid, such amount will not be taxable.

12. MISCELLANEOUS BENEFITS

These include all other benefits in kind that an employee may enjoy at the expense of the employer;

E.g. remuneration of domestic assistants by the employer on behalf of the employee; the amount of the remuneration paid to the assistants is added to the employee's salary before calculation of tax.

The value of free passages by road, rail, ship, or air that are paid for an employee. Such value is not taxable if the duration for the employment contract is two years or more. If the contract is less than two years the contract should not be renewable.