With effect from 1 March 2010, 80% of a travel allowance is subject to the deduction of employees’ tax. With effect from 1 March 2011, an exception is allowed in cases where the employer is satisfied that at least 80% of the use of the motor vehicle will, during the year of assessment be for business purposes, then only 20% of the allowance is subject to the deduction of employees’ tax.
Employees must, in order to claim travel expenses for business purposes against this allowance when completing their income tax returns, keep a record of actual business distances travelled (e.g. a logbook).
With effect from 1 March 2018, reimbursement exceeding the rate of R3,61 per kilometre must be included as remuneration to calculate the amount of employees’ tax to be withheld. Please note the 12 000 kilometre parameter has been removed for the purpose of calculating employees’ tax but will be applicable upon assessment.
The full travel allowance must be reflected under the prescribed codes on the IRP5/IT3(a) tax certificates as described in the PAYE-GEN-01-G13 Guide for Employer in respect of Employees Tax for 2019, Revision 1 Page 5 of 42.