Updated travel allowance tax deduction for 2025/2026
Click the button below to see more info about how the travel allowance
tax deduction for business kilometres has changed for 2025/2026.
With the tax filing season now open until 24 October 2022 for non-provisional taxpayers and until 23 January 2023 for provisional taxpayers, some taxpayers are still not certain how the reimbursement for business kilometres travelled is determined.
Any allowance paid or advance given to an employee in respect of travelling expenses for business purposes is referred to as a travel allowance.
Fundamentally, the legislative framework makes provision for two scenarios:
The simplified method makes use of a fixed rate per kilometre where no other allowance or advance and no other compensation in the form of a further allowance or reimbursement (other than for parking or toll fees) is paid by the employer to the employee.
This prescribed rate is also known as the AA rate per kilometre and is R4.18 for the 2022-2023 tax year. Reimbursive travel cost at the prescribed rate is non-taxable. However, where the reimbursed rate exceeds the prescribed rate of R4.18 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. |
