9 November 2020 at 21:08
As part of my package I receive the benefit of a fuel card and car allowance (but I do not do any business travel). However, on my tax return for 2020 I had to pay almost R9k because of this benefit. I had thought that our Human Resource Department would have made adjustments to my PAYE so that I would be paying 100% of the applicable tax so that I do not have anything to pay when I do my tax return once a year. Our Human Resource person said that he was not able to set the PAYE so that I could in future pay 100% of the fuel and car allowance benefit, but was limited to set it at 80%.
I am very much confused, is this correct?
This entry was posted in Tax Q&A and tagged Salary / IRP5, Independent Contractor, Deductions, Commission, Travel Allowance, PAYE & UIF. Bookmark the permalink.
10 November 2020 at 11:59
It is normal practice to only include 80% of the travel allowance benefits when calculating the PAYE deduction.
As from 1 March 2019, the option to deduct PAYE on 100% of the travel benefit is no longer available.
If you want your employer to tax the benefit at 100% you will need to ask your employer if they would add an addition PAYE deduction on your salary to cover the tax that would be due on the other 20% that was not calculated in their calculation. This would be done manually by them, therefore your employer may decline your request.