Question:

If a computer was purchased to be used by an employee and the market value were less than the amount paid/cost, eg. market value is R4000 and cost was R7500, also if the employee acquired the use of the computer half way through the tax year for example ,how would the fringe benefit be calculated?

Answer:

If the employee acquired the use of the computer half way through the tax year for example, then the 15 % annual use is apportioned by 50 % (6/12mths). The fringe benefit is calculated on the lower of cost or market value – therefore if the market value is R 4000 the fringe benefit would be calculated as follows: R 4000 x 15 % x 50% = R 300 for the current tax year.