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;


• 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

 A reimbursed travel allowance is when the employer reimburses the employee for actual business kilometres travelled.

 The expenditure for business purposes is deemed to be the cost per the table of rates (as announced in the Government Gazette).

Another option is available to a taxpayer in terms of reimbursed travel allowances. Where the total business travel for the year does not exceed 12 000 km and where no other travel allowance is received, the taxpayer can choose to deduct a fixed rate per business kilometre (as determined by the Minister of Finance by notice in the Government Gazette) from the allowance. This rate is currently 361 cents per Travel allowance kilometre effective from 1 March 2018. Where more than one vehicle was used for business purposes, all business travel must be aggregated when compared to the 12 000km threshold. If both a fixed travel allowance and a reimbursed travel allowance are received by a taxpayer, both amounts will be added together on assessment and treated as a travel allowance. In this case, the deduction of a fixed rate per business kilometre will not be available even if the requirements are met.

The Destinata team of specialist accountants, will assist with your submission of your 2019 assessment to SARS.

You can contact Destinata Accounting for a quotation on your personal tax return.

The personal tax season starts 1 July 2019.  Be ready!

Please contact if you need information or assistance