Fringe Benefit Tax Explained
Summary
TLDRThis video script discusses French benefits, focusing on defining them and explaining their taxation. French benefits are supplementary perks for non-rank-and-file employees, such as housing or company cars. Since 2018, the tax rate for these benefits is 35%. The script provides a method for calculating the tax by dividing the monetary value by 65 and then applying the tax rate. Examples include educational assistance and housing benefits, with detailed computations for each. The video also highlights the importance of understanding French benefit tax computations, even if they are rarely encountered in practice.
Takeaways
- 📚 French benefits are supplementary benefits given to employees, particularly those in supervisory or managerial positions.
- 💼 Examples of French benefits include housing, money, company car, and memberships.
- 📈 The tax rate for French benefits increased to 35% effective January 1, 2018, following the implementation of the TRAIN law.
- 🧮 To calculate the French benefit tax, divide the taxable monetary value by the gross-up factor (65) and then multiply by the tax rate (35%).
- 🏦 If the benefit is in the form of money, its face value or the amount paid by the employer is used for valuation.
- 🏠 For property benefits, the fair market value is used if there's a transfer of ownership, otherwise, the depreciable value is considered.
- 🔢 The script provides a detailed computation example for educational assistance with a French benefit tax of 42,000.
- 🏡 Another example given is housing benefits, where the higher of market value, zonal value, or assessed value is used for computation.
- 💼 The script lists 10 types of French benefits under the tax code, each with its monetary value.
- 👍 The presenter encourages viewers to engage with the content by liking, commenting, and subscribing for more informative videos.
Q & A
What are French benefits?
-French benefits are supplementary benefits given to employees, particularly those in supervisory or managerial positions, and may come in forms such as housing, money, company car, membership, or others.
What is the tax rate for French benefits effective January 1, 2018?
-The tax rate for French benefits effective January 1, 2018, is 35 percent.
How is the monetary value of a French benefit determined for tax purposes?
-The monetary value of a French benefit is determined by dividing the actual monetary value by 65, which is the gross-up factor.
What is the formula to compute the French benefit tax?
-To compute the French benefit tax, you take the taxable monetary value, divide it by the gross-up factor (65), and then multiply the result by the French benefit tax rate (35%).
How do you determine the monetary value of a French benefit if it's in the form of money?
-If the French benefit is in the form of money and paid directly by the employer, the monetary value is the face value of the money or the actual amount paid.
What is the valuation of a French benefit if it's in the form of property with transfer of ownership?
-If the French benefit is in the form of property and there is a transfer of ownership, the fair value of the property is used for valuation.
How is the monetary value of a French benefit determined if it's property without transfer of ownership?
-If the French benefit is in the form of property without transfer of ownership, the depreciable value of the property is used as the valuation.
What are the 10 French benefits enumerated under the tax code?
-The script does not provide the specific list of the 10 French benefits, but it mentions that they can be found in the tax code along with their monetary values.
Can you provide an example of how to calculate the French benefit tax for educational assistance?
-For educational assistance of 78,000, the taxable value is calculated by dividing 78,000 by 65, resulting in a taxable value of 120,000. Multiplying this by the tax rate of 35% gives a French benefit tax of 42,000.
How is the French benefit tax computed for housing benefits?
-For housing benefits, the higher value between market value, zonal value, or assessed value is used. In the example, the higher value of 1.8 million is multiplied by 5% and then by 50 to get a monetary value of 45,000. This is then divided by 65 to get the taxable value, which is then multiplied by the tax rate of 35% to get the French benefit tax of 24,231.
Why is it important to know how to compute French benefit taxes even if they are rare in practice?
-It is important to know how to compute French benefit taxes to ensure compliance with tax laws and to accurately account for all forms of employee compensation, even if they are not commonly encountered in everyday practice.
Outlines
💼 Understanding French Benefits and Taxation
This paragraph discusses French benefits, which are non-salary compensations given to employees, particularly those in supervisory or managerial positions. Examples of such benefits include housing money, company car memberships, and others. The tax rate for French benefits, as per the TRAIN law implemented on January 1, 2018, has been increased to 35 percent. The gross-up monetary value of the benefits given to non-rank and file employees is determined by dividing the actual monetary value by 65. The computation of the French benefit tax involves dividing the taxable monetary value by the gross-up factor and then multiplying by the French benefit tax rate of 35 percent. The paragraph also explains how to determine the monetary value of French benefits, whether they are in the form of money, property with transfer of ownership, or property without transfer of ownership. A list of 10 enumerated French benefits and their monetary values is mentioned, with examples provided for educational assistance and housing benefits, illustrating how to calculate the French benefit tax for each.
📢 Closing Remarks and Call to Action
In this closing paragraph, the speaker expresses gratitude to the viewers for their support of the channel. They invite viewers to leave comments with any suggestions for content they would like to see covered in future videos. The speaker also encourages viewers to subscribe to the channel if they haven't already done so. The paragraph ends with a personal note from the speaker, Gerard, wishing viewers a great day.
Mindmap
Keywords
💡Fringe Benefit
💡French Benefits
💡Tax Rate
💡Gross Up Factor
💡Taxable Monetary Value
💡Monetary Value
💡Property
💡Transfer of Ownership
💡Tax Code
💡Illustration
Highlights
Definition of French benefits as supplemental compensation for non-rank and file employees, particularly those in supervisory or managerial positions.
Examples of French benefits include housing, money, company car, and memberships.
French benefit tax rate increased to 35 percent effective January 1, 2018, due to the implementation of TRAIN law.
Gross up monetary value of French benefits is determined by dividing the actual monetary value by 65.
Tax computation involves dividing the taxable monetary value by the gross up factor and multiplying by the French benefit tax rate.
Valuation of French benefits depends on whether the benefit is money, property with transfer of ownership, or property without transfer of ownership.
For money benefits, the face value or actual amount paid is used for valuation.
For property benefits with transfer of ownership, the fair market value is used for valuation.
For property benefits without transfer of ownership, the depreciable value is used for valuation.
There are 10 enumerated French benefits under the tax code, each with a specified monetary value.
Illustration of tax computation for an educational assistance French benefit of 78,000.
Tax computation results in a French benefit tax of 42,000 for the educational assistance example.
For housing benefits, the higher value between market, zonal, or assessed value is used for tax computation.
Tax computation for housing benefits results in a French benefit tax of 24,231.
French benefit taxes are rare in practice, but understanding their computation is beneficial.
Encouragement for viewers to engage with the content by giving a thumbs up and subscribing.
Transcripts
i'll be discussing about french benefits
so i'm going to be defining what french
benefits are and then give
some examples of french benefits that
may be subject to
taxes then discuss the evaluation of
your fringe benefit
and then give sample computations of
your french benefit tax so a fringe
benefit
is a benefit that supplements the
compensation of an employee
particularly an employee that's not rank
and file more of the
supervisory or managerial positions and
it may come
in the form of housing money
company car membership or others
so the tax rate for french benefits
effective
january 1 2018 which is actually the
implementation of your train law the
french benefit tax
is increased to 35 percent the gross up
monetary value of the
french benefit given to non-rank and
file
employees shall be determined by
dividing the actual monetary value
by 65 so to compute your french benefit
tax we have your
taxable monetary value divide that up
with your gross up factor
then multiply that with your french
benefit tax rate which is actually your
35
now in determining your monetary value
of your french benefit you have to
look into it if the benefit received by
the employee is either money or
property if it's money or paid directly
by the employer
the face value of the money or the
actual amount paid for
whereas if it's property and there is
transfer of ownership
the fair value of the property and
subject to your section 6 of your tax
code
whereas if it's property as well but
there is no transfer of ownership
the depreciable value of the property
shall be your valuation
so i listed down the examples of your
french benefit along with their
valuation or their monetary value now
under your tax code there are actually
10 french benefits that were enumerated
there you can check out the
french benefit along with the monetary
value in this
list that i've created over here
so let's go to your first illustration
the french benefit that was given by the
employer over here
is your educational assistance of 78
000. so from the monetary value of your
finch benefit which is your 78 000
we divide that by your gross up factor
of your
65 and then we'll arrive at your taxable
value of your french benefit
which is 120 000 and then we multiply
that
by your french benefit tax rate which is
your 35
so the french benefit tax is 42 000.
so let's go to your second illustration
the fringe benefit that we're talking
about here is in terms of your housing
now for tax purposes the following we're
given you have your market value
zonal value and assessed value now in
solving this we have to select whichever
is
higher between the market value zonal
value or your assessed value
so to compute your monetary value you
have your 1.8 million which is the
higher of the three
multiply that by your five percent and
then again multiply that by 50
and then we'll get your monetary value
of 45
000 so after we get the monetary
value of 45 000 that's the time we
divide that again with your 65
gross up factor and then we'll arrive
with your taxable value
of your french benefit and then multiply
that again with your french benefit tax
rate of 35
so we'll get your french benefit tax of
24
231. and that's it although french
benefit taxes are
a bit rare in terms of actual practice
it's still good if we
know how they are computed
so if you found this video very helpful
please give it a thumbs up and as always
guys a huge thanks for
supporting the channel if you have any
comments or
suggested content that you'd like me to
cover you can comment down below
and consider subscribing if you haven't
yet already
so this is gerard have a great day
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