Good news on scholarships
Does your employer assist you with sponsored education? Or would you, as an employer, like to assist your employees with sponsored education?
Great news in this week's Budget for both employers and lower- and middle-income employees is that there is a great saving on bursary schemes.
Christa Botha, manager for payroll and associated tax services at Ernst & Young, said currently an employer may grant a bursary or scholarship of up to R3000 a year to an employee's relative without an employee paying any additional tax, as long as the employee does not earn more than R60000 a year.
But changes introduced by Finance Minister Trevor Manuel in his Budget on Wednesday is that employers may assist employees' relatives with an amount of up to R10000 a year without paying additional tax, as long as the employee earns less than R100000 a year.
Taking into account the changes from the 2007/8 Budget, whereby an employee correctly structures the amount of the scholarship into his or her salary package, further tax savings may be possible, said Botha.
She said this change may result not only in tax savings for employees but also in a benefit that would contribute to staff retention as well.