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South Africa: Revised tax treatment, reimbursed travel allowances

South Africa: Revised tax treatment, travel allowances

New rules in South Africa require PAYE (pay as you earn) withholding on any travel reimbursement to employees, calculated at a rate higher than the prescribed rate.


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Therefore, effective 1 March 2018, an employee will pay tax upfront under the PAYE withholding process on reimbursive travel allowances, if the employees are reimbursed at a higher rate. The prescribed rate per kilometre is currently R3.61 per kilometre.  

Under the new rules, the South African Revenue Service has allocated new payroll codes, and these codes have been incorporated into payroll software by the payroll authors. 

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Employers will need to update their policy and procedure documentation to incorporate the new codes when reimbursive travel allowances are paid to employees.


Read an April 2018 report [PDF 140 KB] prepared by the KPMG member firm in South Africa

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