|MARCH 2022 – SOUTH AFRICA
RATES IN RESPECT OF MOTOR VEHICLES AND THE AA RATE
It is important that employers note the following:
SARS rate per kilometre in respect of motor vehicles
Following the 2022/2023 Budget Speech on 23 February 2022, the Minister of Finance has determined that the rate per kilometre referred to in Section 8(1)(b)(ii) and (iii) of the Income Tax Act must be amended for the 2022/2023 tax year.
A notice stipulating the rates was published on SARS’s website, effective 1 March 2022.
Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined by using the following table:
|AA rate per kilometre
Where the reimbursed rate exceeds the prescribed rate of R4.18 (previously R3.82) cents per kilometre, irrespective of the business kilometres travelled, there is an inclusion in remuneration for PAYE purposes. The full inclusion amount is subject to PAYE, unlike the fixed travel allowance where only 80% of the amount is subject to PAYE.
However, this alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.
To view the SARS notice, follow the link.
Contact our legislation team at firstname.lastname@example.org if you require any additional information.
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