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Thread: OUTBONUS - Tax treatment

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    OUTBONUS - Tax treatment

    How should an outbonus be treated for income tax and VAT?

    Please help :-)

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    Site Caretaker Dave A's Avatar
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    The options seem to be treat it as income, or as a refund of insurance payments already made.

    Does the insurance contract give any guidance as to whether this is a refund or a benefit payout in the eyes of the insurer?
    The trouble with opportunity is it normally comes dressed up as work.

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    Silver Member geraldenek's Avatar
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    dave has a valid point seeing that i do not have an outsurance contract to see what they say....

    i tried phoning them... think they guy on the other side must have thought i am crazy asking such a question - money tax free?! as stated on their website and still asking questions . But he said he will get back to me i just need to hold for a sec... and then after a while i heard the sound of a line being disconnected.
    Geraldene Kapp
    Professional Tax Help
    www.mytaxhelp.co.za

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by geraldenek View Post
    i tried phoning them... think they guy on the other side must have thought i am crazy asking such a question
    Just not used to dealing with people that actually got a payout, perhaps
    The trouble with opportunity is it normally comes dressed up as work.

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    Hi,

    Thank you for your responses. I have decided to treat it as other income (created a new account for this, this will be the same account that I will use for insurance claims). As VAT will need to be paid over for this as well as income tax, I thought this would work well.

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    Silver Member geraldenek's Avatar
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    hi J7J

    according to their website it is tax free... so you might go and read the contract as to the reason how they treat the payout as per Dave's first reply....
    Geraldene Kapp
    Professional Tax Help
    www.mytaxhelp.co.za

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    Site Caretaker Dave A's Avatar
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    Maybe it's a dividend and Outsurance has already paid the taxes
    The trouble with opportunity is it normally comes dressed up as work.

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