Employers may grant a tax-free long service award (in cash or as a gift of an item/voucher) to an employee to a maximum value of R5,000. Any amount or value over the R5,000 is subject to income tax.
For an award to qualify as a long service award, the asset must have been given by an employer to an employee for being in employment with the same employer for
- an initial unbroken period of service of at least 15 years; or
- any subsequent unbroken period of service of not less than 10 years since the last long service award was granted.
Awards granted for outstanding performance or for any reason other than long service do not qualify as tax-free on the first R5,000 awarded.