Employees in South Africa who use their personal vehicles for work-related activities may find that employers offer financial support in the form of a travel allowance. This allowance is intended to help cover the costs of fuel, maintenance, and other car-related expenses incurred while performing work duties. While it forms part of taxable income, employees can often claim a portion of these costs as a deduction, reducing their overall tax liability. Travel allowances cannot be treated as a simple addition to your salary package; they must comply with the requirements and
provisions as set out by SARS.
A travel allowance is essentially a reimbursement mechanism for business travel using a personal vehicle, with two approaches available:
Fixed Allowance: A regular payment made regardless of actual distance travelled.
Reimbursive Allowance: Payment calculated based on the exact business kilometers driven, following rates prescribed by SARS.
“Travel allowances must be backed by accurate records to qualify for tax-deductible business travel.”Speak to a Specialist
Accurate record-keeping is critical:
Travel allowances are treated differently depending on the type of allowance and usage:
When filing a tax return, employees reconcile the total travel allowance received with actual business expenses:
If this article raised questions or highlighted areas you’d like to understand better, let’s talk.Our team can walk through the details, implications, and practical considerations for your business.
