Travel Allowances outdated

Travel Allowances: Outdated

What are Travel allowances

Travel allowances are payments made by employers to employees to cover the costs associated with business-related travel ONLY. These allowances can include expenses such as accommodation, meals, and transportation. However, it’s essential to understand the tax implications of these allowances.

Taxation of travel

In South Africa, the taxation of travel allowances is subject to specific rules outlined by SARS ( South African Revenue Services). Employees must keep detailed records of their business-related travel expenses, and employers are required to withhold the correct amount of tax based on these records. This is where log books come into play.

What is a log book
Different types of travel allowances

Employees need to be aware of the distinction between different types of travel allowances, such as fixed and variable allowances. Fixed allowances are predetermined and fixed amounts, while variable allowances are based on actual expenses incurred. The tax treatment differs between these types, and adherence to the correct guidelines is crucial.

So, navigating travel allowances, tax implications, log books, and SARS regulations requires diligence and attention to detail. Keeping accurate records of business-related travel is essential to ensure compliance with tax laws and avoid potential issues with SARS. Employers and employees alike should stay informed about any changes in regulations to maintain financial integrity and avoid penalties.

Stay informed with Paymaster

Please read our article on How to tax a travel allowance. 📖

Contact Paymaster for more information about your payroll and tax implications. Speak to Ian Hurst at ian@paymaster.co.za or 082 898 5006.

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Bursary Article

Bursaries and Scholarships: Unpacking the Tax Rules

Any bursary or scholarship granted to assist an employee (or their family member) to study at a recognised educational or research institution may be exempt from tax.

The bursary must be granted to the employee or one of their children.

What is taxable

  1. If the bursary is granted to an employee, where the employee does not agree to repay the money if the employee fails to complete the studies for reason other than death, ill health or injury
  2. If the employee  earns more than R 600 000 per year
  3. Low interest or no interest-bearing loans will be taxed as a fringe benefit
  4. A  loan that is written off should the employee pass will be seen as a benefit and will then be  seen as taxable

Funding

What is not taxable

  1. A bursary of R 20 000 for your relatives – if you earn less than R 600 000 p/a…for Grade 1 -12, or qualifications from NGF level 1-4. For qualifications from NQF levels 5-10, R60 000 is allocated.
  2. All expenditure related to internal on-the-job training, such as:

        a)    Computer and word processing courses

        b)     Management and administration courses

        c)     Bookkeeping courses

        d)     Sales courses

        e)     Courses in operating office and technical equipment; and

        f)      Language courses for employees.

   3. A loan that is repaid at the required interest rate with no reward for passing.

Consider offering your deserving employees (or their families) access to education through bursaries. HRmaster recommends you consult a tax expert to understand all the implications, as this is just an introduction to guide you as you contemplate this option.


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