Betty Bookkeeper explains how to allocate a monthly gym fee for a member of a Close Corporation – Jun 2015

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Hi Betty 

Please explain how a member of a Close Corporation’s monthly gym fee be treated when captured in the cashbook?

I was asked to take it to expense account Staff Welfare? I don’t think this is correct, please advise?

Thanks,
Yashik

Hi Yashik

You are right, for income tax purposes that is not correct. If the CC pays the fees on behalf of the member, then one of the following approaches should be taken:

  • This should be allocated to the member’s loan account; or
  • This should be allocated to the member’s remuneration, and treated as a fringe benefit on his payslip and IRP5 – code 3808: payment of a debt on behalf of an employee.

Hope that helps!

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