Fringe benefits and taxable benefits — Seventh Schedule guide
Fringe benefits are non-cash rewards from an employer that must be valued and added to the employee's remuneration for PAYE purposes. Rules are set by the Seventh Schedule to the Income Tax Act and include company cars, low-interest loans, medical aid contributions and residential accommodation.
Payroll Africa Editorial · SARS Payroll Compliance Team
The Payroll Africa editorial team is composed of registered tax practitioners, payroll administrators and BCEA specialists who maintain the SARS PAYE, UIF, SDL and ETI engines that power the platform. Every article is reviewed against the current SARS BRS and Basic Conditions of Employment Act before publication.
- SARS registered tax practitioners
- SAPA-affiliated payroll administrators
- BCEA and LRA compliance reviewers
Last updated 30 Sept 2026
Common fringe benefits and IRP5 codes
The most common fringe benefits and their IRP5 source codes:
- Right of use of a company car — 3802 / 3816
- Medical aid paid by employer — 3810
- Low-interest loan — 3801
- Free or cheap services — 3808
- Residential accommodation — 3805
- Employer contribution to a retirement fund — 3817 / 3825
Company car (Paragraph 7)
The taxable value is 3.5% of the determined value of the vehicle per month (3.25% if a maintenance plan is included). 80% of this value is subject to PAYE (or 20% if more than 80% of use is for business).
Medical aid contributions
Employer contributions to a registered medical scheme are a taxable fringe benefit reported under code 3810. Employees receive a medical scheme fees tax credit (source code 4116) that reduces PAYE.
Frequently asked questions
Related guides
Stop looking this up. Let payroll do it.
Payroll Africa applies Fringe benefits rules automatically every month — SARS PAYE, UIF and SDL, payslips, EMP201 and IRP5. From R90/month.
- No card required
- 30-day free trial
- Free migration from Sage, SimplePay, PaySpace or Excel
- Cancel anytime
Run Payroll Africa alongside your current system until you're happy to switch.