Travel Allowance - Personal Tax Season

by Cassie Henning


Travel Allowance

The 2019 Personal tax season is around the corner and there are some aspects that one needs to be aware of.

One of these aspects is travel allowance.

If you earn a travel allowance from your employer, it will fall under the source code 3701 on your IRP5.

There are two types of travel allowances:

 • Fixed travel allowance – A fixed monthly amount is paid, regardless of your actual travel;

    and

• Reimbursed travel allowance – The allowance is paid based on actual business km's travelled.

Fixed travel allowance

Taxable amount = Gross allowance – expenditure for business purposes

Only the part associated with private use will fall into the recipient's taxable income. Expenses for business purposes can only be claimed if the taxpayer keeps an accurate logbook of his/her business travels. 

There are two ways to calculate the portion of the allowance or advance expended for business purposes:

1. Expenditure for business purposes = Actual business kilometres travelled during the year x deemed rate per kilometre (as per the latest table of rates announced in the Government Gazette)

2. Expenditure for business purposes = Actual business kilometres travelled during the year x actual rate per kilometre (as supported by accurate records kept)

Travelling between the recipient's place of residence and his or her place of employment is not regarded as business travel (s 8(1)(b)(i)).

There is also an exception to the rule, were a taxpayer has the right of use of a par 7 company car and the taxpayer receives a fixed travel allowance in respect of the same vehicle. 

The full travel allowance is taxable and therefore, no deductions will be allowed against the travel allowance. The right of use of the motor vehicle will be a taxable fringe benefit ito paragraphs 2(b) and 7 of the Seventh Schedule. Par 7(7) and 7(8) reductions will be allowed against the value of the private use of the company car.

Reimbursed travel allowance

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