We give our employees a subsistence allowance of R 120 per night spent away (Meals and incidental) from home. From my knowledge, I know that this this allowance is not taxable thus no employees tax may be deducted from the subsistence allowance regardless of whether the deemed amounts have exceeded or not. Is this correct?
The SARS subsistence rates for 2015/2016 are R109 for incidentals only, and R353 for meals and incidentals. These allowances are not subject to employees tax and the employee does not need to provide proof of the actual expenses incurred. However, any allowance given in excess of these SARS approved deemed rates would be taxable in the employee's hands.
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