If your employer pays you a travel allowance, you’re sitting on one of the most underused tax deductions in the country. The allowance itself is taxable, but the portion you use for genuine business travel can be claimed back — if you keep the records. Without a logbook, SARS taxes the whole thing and you get nothing back.
How a travel allowance works
Distinguish a fixed travel allowance from reimbursement for recorded business kilometres. Their payroll treatment and assessment rules differ. For a fixed allowance, an allowable business-travel deduction can be based on qualifying actual costs or SARS’s vehicle-cost table. Do not substitute a reimbursement rate for that calculation.
The net effect: if you travel a lot for work, the deduction can wipe out most or all of the tax on the allowance. If you don’t travel much, or don’t keep records, the allowance is just taxed cash.
The two ways to claim
1. The deemed rate (simpler)
SARS publishes a vehicle-cost table each tax year. It uses vehicle value, total distance and the applicable fixed, fuel and maintenance components to calculate a business-travel deduction. Whether you bore the fuel and maintenance costs matters. Use the worksheet for your assessment year rather than one flat rate for every car.
The separate prescribed kilometre rate used for qualifying reimbursive allowances is a different rule, with conditions relating to other vehicle compensation. Ask payroll which category appears on your certificate before choosing a method.
2. Actual costs (more work, sometimes more value)
You track all vehicle costs — fuel, insurance, maintenance, licence, finance interest — and claim the business proportion based on your logbook’s split between business and private kilometres. If you drive an expensive car with high running costs and mostly for business, this can exceed the deemed rate. But it demands disciplined record-keeping.
The logbook: what SARS requires
A valid logbook records, for the full year:
- The vehicle’s odometer reading at the start and end of the year.
- For each business trip: the date, destination, reason, and kilometres.
- The split between business and private use.
The logbook must be kept from day one — you can’t reconstruct it at year-end and expect SARS to accept it. Many people use a small notebook, a spreadsheet, or a dedicated app; the format matters less than the completeness.
What counts as “business kilometres”
Ordinary home-to-work commuting is private. Record the purpose and destination of client or worksite trips and distinguish genuine business travel from the normal commute. Do not assume every home-to-client journey qualifies merely because a client is involved; unusual arrangements need advice based on the facts.
A simple example
For a fictional logbook, opening mileage is 40,000 km and closing mileage is 60,000 km. Total distance is 20,000 km. If documented business trips total 6,000 km, the business share is 30%. This is a record check, not a tax deduction of 30% of the allowance: the cost method, eligible expenses and allowance limit still need to be applied. A deduction reduces taxable income; it is not a rand-for-rand refund.
Where to verify
- SARS — Travel e-logbook — annual cost table and record requirements.
- SARS — Employers’ allowances guide — fixed and reimbursive travel categories.
For context, read how to read your IRP5.