Travel Allowance Tax in South Africa (2026/2027)
A travel allowance is a taxable benefit paid by an employer for the use of a private vehicle for business. SARS allows employees to reduce the taxable portion by claiming a deduction for business kilometres.
The deemed cost method uses R4.64/km. The actual cost method uses the SARS fixed cost table for fixed cost, fuel, and maintenance. Compare both methods to minimise your tax.
Frequently Asked Questions
What is the deemed cost rate?
R4.64 per km for 2026/2027.
When should I use actual cost?
When actual vehicle costs exceed the deemed cost deduction, typically for high-km drivers.
What records do I need?
A logbook recording business km, total km, dates, destinations, and purpose of each trip.
Is a travel allowance taxable?
Yes, but you can deduct the business-use portion. The difference is what gets taxed.
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