Hide
Earn under R350,000? Click here to see why you still need to file to get your Tax Refund.
CLOSE
Get Tax Deadline Reminders, News and Tips
 

We'll tell you when you need to file, along with tax tips and updates.

Car allowance vs Company Car?

Posted 25 April 2013 under Tax Q&A


Let TaxTim
help you
submit your
Tax returns!


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
Could someone please help me to understand what would be the best option. I am currently sitting in a situation where I can choose between a car allowance (travel allowance ) and a company car. I don't understand the tax implications regarding this.. I would obviously want to take the least expensive route..

This entry was posted in Tax Q&A and tagged , , , , , . Bookmark the permalink.

TaxTim TaxTim says:
25 April 2013 at 23:35

It would depend on the car that is being offered and the value of it vs how much travel allowance you are being offered.

Company Cars are taxed at a certain rate and subject to a specific formula. However this can become very costly to you from a tax point of view as if the company itself buys the car via a lease agreement and then lets you use it there are severe tax implications. However then the wear and tear that you would suffer on your personal car doesn't apply. A travel allowance is taxable in your hands at 80% of the value, but you can deduct the business mileage that you travel as well as other costs. However you then have the issue of wear and tear of your car. It would depend on the value of what they are offering and how much business travel you actually do.


Get Tax Deadline Reminders, News and Tips
 

We'll tell you when you need to file, along with tax tips and updates.

Blog Categories


Let TaxTim
help you
submit your
Tax returns!


TaxTim will help you:

 Do Your Tax Return Easily
 Avoid penalties
 Maximise your refund

Tim uses your answers to complete your income tax return instantly and professionally, with everything filled in in the right place.

Let Tim submit your tax return direct to SARS in just a few clicks!

Get started