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.
Try Tim Now

How should I structure my travel allowance?

Posted 25 September 2012 under Tax Questions


Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →
I have regesterd a small business and are drawing a salary as an employee. I travel a lot for the business. Should I ad a travel Allowence to my salary or have the business deduct it from it's tax and if I could ad a travel allowance what is the maximum and what can be payed from this allowance, eg petrol, maintenance and car payments.

Should I produce a log book at the end of the tax season or every month.

Which way is the most cost effective

This entry was posted in Tax Questions and tagged , , , , , . Bookmark the permalink.

TaxTimTaxTim says:
21 September 2012 at 21:42

Firstly if you receive a travel allowance and you wish to claim expenditure against this then you have to keep a log book and detail all work travelling. If you do not keep an accurate logbook then SARS will not allow a deduction

Do you pay for all your petrol and maintenance on the car?

Regardless of whether you ad the travel allowance to your salary or have it separately your business would still be allowed a deduction as it is a expenses incurred in producing income. It isn't advisable to make your travel allowance too big as SARS may question this. Travel allowances are only taxed at 80% of it's value, so in effect your allowance would actually be included at R3 200.

What may be better from your point of view is to claim a re-imbursive travel claim at the SARS rate which is set at R3.04 per km. If you travel less than 8000km per year then this would mean that you don't get taxed, but for every business km you drive the business would actually pay you back R3.04 per km which is supposed to cover petrol and maintenance. You would not need to keep a logbook here which is a whole lot simpler.


Get Tax Deadline Reminders, News and Tips
 

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

Blog Categories


Ask TaxTim

Got a question you want answered about tax?

Visit our helpdesk →

Hello.
Is it me you're looking for?
I'll help you do your Tax Return with Confidence
Quickly, Easily
And Correctly
Do your own
Tax Online with Expert Help from Me, Step-by-Step.
LEARN MORE