Travel allowance explained

Three kinds of vehicle pay

• Travel allowance: a fixed amount each month towards using your own car for work. Taxable, with a deduction for business travel on assessment.
• Reimbursive allowance: your employer pays you per business kilometre. Up to R 4,95 a kilometre is tax-free in 2026/27, if you get no other vehicle allowance apart from parking or tolls.
• Company car: a car your employer owns that you may use privately. This is a taxable fringe benefit, not an allowance.

PAYE during the year

Your employer withholds PAYE on 80% of a travel allowance. If it is satisfied that at least 80% of your use is for business, it withholds on only 20%. This is just a rough split: the final figure comes when SARS assesses your return.

The deduction on assessment

On your tax return you claim the cost of business travel against the allowance. Most people use SARS’s deemed cost table, which sets a fixed cost a year for the car’s value plus a fuel and a maintenance cost per kilometre. The fixed cost is spread over all the kilometres you drove, and the deduction is the resulting cost per kilometre times your business kilometres. You can only include fuel and maintenance if you paid all of them yourself, so a car under a maintenance plan loses the maintenance part.

Keeping a logbook

Without a logbook you cannot claim any business travel. For each business trip record the date, where you went and why, and the kilometres. Also record the odometer reading at the start and end of the tax year. Trips between home and your usual workplace are private, even if you take work calls on the way. Apps that log trips automatically are fine, as long as the records show the same details.

Actual costs instead

If you keep every receipt for fuel, maintenance, insurance, licence and finance charges, you can claim actual costs instead of the deemed table, as a business share of the total. It takes more record-keeping and helps mostly when your real costs are much higher than the table.

Frequently asked questions

Is a travel allowance worth more than a company car?

It depends on your business kilometres. Lots of business travel with a well-kept logbook usually favours an allowance; mostly private use often makes a company car or a higher salary simpler.

What if I drive less for work than my allowance assumes?

Then the deduction is small, more of the allowance is taxed on assessment, and you may owe SARS more than the PAYE withheld.

How long must I keep my logbook?

Keep it with your tax records, usually for five years after you submit the return, in case SARS asks for it.

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