Calculation-Tax on Fringe Benefit

Tax on Fringe Benefit for Cambodia Tax 

Tax on Fringe Benefit is applied for employee.

The employer shall withhold and pay tax at the rate of 20% of the total value of fringe benefits given to all employees. The value of fringe benefits is the fair market value inclusive of all taxes.

Fringe Benefit is benefit for personal employee.

The following expenses are taxable for fringe benefits when employer ( company) provides employees: 

• Company provided accommodation support ( including utilities and domestic helpers)
• Company lends employees loan but charge low-interest loans.
• Sale discount for employees.
• Offer education assistance ( unless related to the employment).
• Contributions to a pension plan ( unless such contributions are not more than 10% of the employee’s monthly basic salary). Contribution to a pension plan in excess of 10% of the employee’s monthly salary (exclusive of
  fringe benefit) is considered as fringe benefit subject to ToFB.
• Entertainment or recreational expenditure for employee (may also be non-deductible expense for income tax purpose).
• Company provided private use of motor vehicles.
• Company provided food for specific employee.
• Health and life insurance premiums ( unless the same benefits are provided to all employees). Life and health insurance premiums provided to employees are exempt from ToFB if the same benefits are provided equally to all employees regardless of employment or job classification.
• Excessive or unnecessary cash allowances to employee.

Example 1

ABC Company provided Mr.A , employee the following transactions during July 2018:

• -Basic Salary of $1,000.
• -Gave goods free of charge, but market value of goods is $220 ( included VAT).
• -Provided personal expense for employee such as utilities, foods and house rental of $400.

Required:

Calculate Tax on Fringe Benefit.

Answer 

Tax Base = 220+400=620

Tax on Fringe Benefit =620 x 20%=$124.

Please note that basic salary of $1,000 is not taxable for fringe benefit but taxable for tax on salary.