Updated tax rules for employee travel and meals in South Africa – what you should know

The South African Revenue Service (SARS) has published an updated interpretation note which provides guidance on allowances, advances and reimbursements to employees.

Professional services firm PwC has published an analysis of the changes and what they will mean for workers and companies.

Meal reimbursements for day trips taken by the employee

With effect from 1 March 2021, where an employee is reimbursed for the cost of meals and incidentals when taking a day trip, the reimbursement is subject to a limit according to the government gazette.

This is currently set at R139 per day, PwC said. Any amount that is reimbursed over and above this limit is fully taxable and subject to employees’ tax withholding.

“In addition, the employee must incur the expenditure on the instruction or with the permission (e.g. if the employer’s policy allows for the expenditure to be incurred) of the employer, and proof of expenditure must be provided by the employee.

“To the extent that the actual costs are less than R139, only the actual costs may be reimbursed tax-free.”

Any amount reimbursed in excess of not only the R139 limit but also the actual costs would be fully taxable, PwC.

Travel logbooks

SARS now requires that travel logbooks must provide additional detail related to the reason for the trip. The contact details of the person visited and with and for whom the engagement was undertaken must be recorded, PwC said.

“SARS requires that as much detail as possible be provided in order to enable them to verify the claim for a deduction. This detail is now also required for reimbursements for ride-hailing service claims, such as Uber.

“Going forward, individuals should be aware of the added requirements, and employers would do well to update internal policies to reflect these changes.”

Read: ‘Communities in South Africa are actively investigating tax revolts’

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Updated tax rules for employee travel and meals in South Africa – what you should know