How Travel Allowances Are Taxed
When your employer pays you a travel allowance (source code 3701 on your IRP5), SARS treats 80% of the allowance as taxable for PAYE purposes during the year. The remaining 20% is treated as tax-free.
However, if you kept a logbook recording your business travel, you can claim a deduction on your ITR12 for the actual business travel costs — which may be significantly more than 20% of the allowance.
If your actual business travel deduction exceeds 80% of the allowance, you will receive a refund of the excess PAYE withheld. If it is less than 20%, you may owe additional tax.
The Logbook Requirement
A logbook is not optional — it is mandatory to claim a travel deduction. SARS requires the logbook to record, for every business trip:
- Date of the trip
- Starting point and destination
- Purpose of the trip (business reason)
- Kilometres travelled
The logbook must also record the odometer reading at the start and end of the tax year (1 March and 28 February) to establish total kilometres travelled.
Without a logbook, you cannot claim any travel deduction beyond the 20% already excluded from PAYE. This means 80% of your allowance is fully taxable.The Two Methods of Calculating the Deduction
Method 1: Deemed Cost (SARS Fixed Cost Table)
SARS publishes annual fixed cost tables that provide a deemed cost per kilometre based on the value of the vehicle. For the 2025 year of assessment:
| Vehicle Value | Fixed Cost (R/year) | Fuel Cost (c/km) | Maintenance (c/km) |
|---|---|---|---|
| Up to R100,000 | R28,352 | 111.7 | 38.5 |
| R100,001 – R200,000 | R50,631 | 125.8 | 51.9 |
| R200,001 – R400,000 | R82,364 | 133.9 | 63.7 |
| R400,001 – R600,000 | R116,803 | 147.7 | 76.8 |
| R600,001 – R800,000 | R154,492 | 158.3 | 93.0 |
| R800,001 – R1,000,000 | R192,683 | 167.0 | 107.3 |
| Above R1,000,000 | R232,574 | 177.3 | 123.4 |
The deduction is calculated as: (Business km ÷ Total km) × Total deemed cost
Method 2: Actual Costs
You can alternatively claim actual costs — fuel receipts, maintenance invoices, insurance, licence fees, and a portion of the purchase price (depreciation). This method requires more record-keeping but may yield a higher deduction for high-mileage drivers.
Practical Example
An employee receives a travel allowance of R60,000 per year. Their vehicle is valued at R350,000. They drove 25,000 km in total, of which 18,000 km was for business.
Deemed cost calculation:- Fixed cost: R82,364 × (18,000/25,000) = R59,302
- Fuel: 18,000 × R1.339 = R24,102
- Maintenance: 18,000 × R0.637 = R11,466
- Total deduction: R94,870
- 80% of allowance taxable during year: R48,000
- Deduction claimed: R94,870
- Net deduction against income: R94,870 − R60,000 = R34,870 (additional deduction)
- At 36% marginal rate: tax saving of R12,553
Common Logbook Errors That Trigger SARS Queries
- Round numbers — a logbook where every trip is exactly 50 km or 100 km looks fabricated
- Business travel on weekends and public holidays — not impossible, but scrutinised
- Business travel exceeding total km — mathematically impossible but surprisingly common
- No odometer readings — the start and end odometer readings are mandatory
- Vague trip purposes — "client meeting" is insufficient; the client's name and purpose should be recorded
Digital Logbooks
SARS accepts digital logbooks, including apps that use GPS tracking. Popular South African options include:
- Drivebook — SARS-compliant GPS logbook app
- TaxTim Logbook — integrated with TaxTim's tax return service
- MileIQ — automatic mileage tracking with business/personal classification
A GPS-based logbook is significantly more defensible in a SARS audit than a manually completed spreadsheet.
Sources: SARS Interpretation Note 14 — Travel Allowances | SARS Fixed Cost Tables 2025
