Taxable portion of a travel allowance using the simplified per-km rate.
Taxable allowance (year)
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Deemed business cost
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PAYE base / month
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The allowance that is partly pay
A travel allowance is money your employer gives you to cover using your own car for work. The wrinkle is that SARS does not let it slip through untaxed, because most people do not drive purely for business. So a portion of the allowance is treated as taxable remuneration each month for PAYE, and only at assessment do you claim back the part that genuinely went on business driving. This calculator works out that business deduction using the simplified per-kilometre method, then shows how much of the allowance stays taxable once the deduction is applied.
The mechanism trips people up because there are two separate moments. During the year, PAYE is deducted on a fixed slice of the allowance, commonly 80 percent. At assessment, your real business travel is set against the allowance, and if you drove enough for work you recover tax. The monthly deduction is a holding position, not the final word.
The simplified per-km shortcut
The simplified method is the easy route for the deduction. Where your business travel is within the limit and you have no other vehicle complications, the deemed business cost is simply your business kilometres multiplied by a prescribed rate. This calculator uses R4.76 per kilometre and applies the simplified method up to 8,000 business kilometres, the figures set for the current year. Above that distance the simplified method is no longer available and you must keep a full logbook and claim actual costs instead. Treat the per-km rate and the 8,000 km ceiling as the tool's assumption and verify the current figures with SARS, which fixes the rate annually by notice.
A R60,000 allowance and 6,000 business km
Suppose your annual travel allowance is R60,000, you drove 6,000 business kilometres out of 20,000 total, and 80 percent of the allowance is subject to PAYE. The deemed business cost is 6,000 times R4.76, or R28,560. Setting that against the R60,000 allowance leaves R31,440 still taxable on assessment. During the year your PAYE was deducted on 80 percent of the allowance, a base of R4,000 a month. Only 30 percent of your driving was for business, which is why a large chunk of the allowance remains in the tax net.
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When a logbook beats the deemed rate
The simplified method is convenient, but it is not always the most generous. If your actual running costs, fuel, maintenance, insurance, depreciation and finance charges, work out to more per kilometre than R4.76, a detailed logbook claiming actual costs can yield a bigger deduction and a larger refund. The trade-off is record-keeping: you need an accurate logbook of every business trip and proof of your costs. For an expensive vehicle covering serious distances, the effort usually pays. For a modest car and light business mileage, the simplified rate is rarely worth beating.
The single biggest mistake with a travel allowance is not keeping a logbook at all. Without one, SARS allows no business claim, and the full taxable portion stands, turning the allowance into ordinary taxed pay. A logbook is the price of admission to any deduction. One edge case the calculator flags: once business travel exceeds 8,000 kilometres the simplified deemed-cost route closes entirely, and only the actual-cost method with a logbook remains, so high-mileage drivers cannot rely on the per-km shortcut even if they would prefer it.
Why is 80 percent of my allowance taxed during the year?
Because SARS assumes most driving is private unless you show otherwise, so 80 percent of the allowance is included in remuneration for monthly PAYE. Where your employer is satisfied that at least 80 percent of your travel is for business, only 20 percent is included instead. Either way, the monthly figure is provisional and the real position is settled at assessment using your logbook.
Does commuting from home to the office count as business travel?
No. Travel between your home and your usual place of work is treated as private, not business, and cannot be claimed. Only travel undertaken in the course of your work, such as driving to clients, sites, or between offices, counts toward the business kilometres that produce a deduction. Logging private commuting as business is a common error that fails on audit.