A travel allowance is an allowance that is given to an employee by an employer to meet the costs of travel dedicated purely for business purposes.

Please note that the travel between home, to the work place cannot be recognised as a travel allowance & it is specifically excluded for the purposes of payroll & that of recognising the tax benefit.

• Actual cash costs incurred by employees for business travel allowance do not form part of taxable income.
• If an employee receives a fixed cash travel allowance & more than 80% of that allowance is for business travel, then 20% of that allowance will form part of taxable income.
• If an employee receives a fixed cash travel allowance & less than 80% of that allowance is for business travel, then 80% of that allowance will form part of taxable income.

• If an employee uses their own motor vehicle for business travel & they are reimbursed at a rate not exceeding R4.84 per kilometre, no tax will apply to that reimbursement, however, any rate greater than that, will be subject to normal PAYE tax.
• Various scenarios can arise with the use of a motor vehicle and the following SARS motor vehicle income tax calculator can be used for more complex scenarios.

Any form of travel allowance is disclosed under “Travel Allowance” on our payslip.

Depending on the type of allowance, the tax effects shall be effected on taxable income as mentioned above.