29 February 2024 – The Minister of Finance has approved the new table of rates per kilometre for motor vehicles in respect of the 2025 year of assessment, for purposes of Section 8(1) of the Income Tax Act No. 58 of 1962.
The Commissioner for SARS has determined the daily amount for expenditure in respect of meals and incidental costs in the Republic of South Africa and the daily amount for travel outside the Republic in respect of the 2025 year of assessment, for purposes of Section 8(1) of the Income Tax Act No. 58 of 1962.
The external guide and annexures have been updated:
- PAYE-GEN-01-G03 – Guide for Employers in respect of Allowances – External Guide
- PAYE-GEN-01-G03-A01 – Rate per Kilometre Schedule – External Annexure
- PAYE-GEN-01-G03-A02 – Subsistence Allowance Foreign Travel – External
Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined using the table in the Notice for the Fixing of rate per kilometre in respect of motor vehicles – section 8(1)(b)(ii) and (iii), under Legal Counsel / Secondary Legislation / Income Tax Notices / 2024.
Note:
- 80% of the travelling allowance must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.
- No fuel cost may be claimed if the employee has not borne the full cost of fuel used in the vehicle, and no maintenance cost may be claimed if the employee has not borne the full cost of maintaining the vehicle (e.g. if the vehicle is covered by a maintenance plan).
- The fixed cost must be reduced on a pro-rata basis if the vehicle is used for business purposes for less than a full year.
- The actual distance travelled during a tax year, and the distance travelled for business purposes, substantiated by a log book, are used to determine the costs which may be claimed against a travelling allowance.
Alternatively:
Where an allowance or advance is based on the actual distance travelled by the employee for business purposes, no tax is payable on an allowance paid by an employer to an employee, up to the rate to published. However, this alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.
