Slip into this little loophole

Published Dec 9, 1998

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You can't avoid tax on your bonus, but there is one thing you can suggest to your employer to reduce the pain a little bit.

Colin Wolfsohn, tax partner at Grant Thornton Kessel Feinstein, says your employer is entitled to pay you up to R500 a year for "occasional services", tax-free. This can be cash, or a cash equivalent, such as a new outfit.

It's a tiny loophole in the tax law which your employer can use to give you a tax-free present at the end of the year.

But, warns Wolfsohn, be careful that this doesn't happen every year at the same time. Otherwise, the taxman will get wise to the plan and tax the money or the gift as a bonus.

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