How do I process a taxable fringe benefit bursary for higher education?

A bona fide bursary or scholarship granted to any person (i.e. an “open” bursary) to study at a recognised educational or research institute is exempt from tax.

If the bursary or scholarship is granted to an employee with or without a disability (i.e. a “closed” bursary), it will be exempt from tax as long as the employee agrees to repay the employer if the employee fails to complete the course of study. No repayment is necessary if the failure directly results from death, ill-health or injury.

If the bursary is taxable, it must be taxed as a fringe benefit (even though bursaries are not specified in the Seventh Schedule which deals with fringe benefits), and reported against code 3809 for basic education and code 3820 for higher education. The exempt portion must be reported against code 3815 for basic education and code 3821 for higher education.

Refer to the payroll pocket guide for more information

• From the Main Menu
• Click on Payroll
• Select Payslip Screen
• Select the Employee Code
• Click on the Taxable Benefits (Perks tab)
• Click  Line 18 (Bursaries Further Education - Tax Val) and capture the amount, and the Times 001 for once-off or the number of months to keep the amount in the system.

 NOTE:  To view the IRP5 codes for the Perks Tax screen, Type PD in the routing block