How do travel allowances and logbooks work?
A travel allowance is a fixed monthly payment given by an employer to cover the costs of using a personal vehicle for work purposes. For tax purposes, the South African Revenue Service (SARS) treats this allowance as taxable income.
To reduce the tax owed on this allowance, the employee must prove how much of the money was actually spent on business travel. The way SARS accepts this proof is through a strictly maintained, daily vehicle logbook.
The 80/20 PAYE rule
Because SARS knows the employee will eventually claim a deduction for business travel, they do not tax the entire allowance upfront on the monthly payslip.
Instead, the employer usually adds only 80% of the travel allowance to the employee's remuneration when calculating monthly tax. If the employer is confident that the employee uses the car mostly for business (more than 80% of total mileage), they are allowed to tax only 20% of the allowance upfront.
However, this upfront discount is temporary. When the final tax return is filed, the employee must prove they actually drove those business kilometres. If they cannot prove it, SARS taxes the full 100% of the allowance, resulting in a large tax bill during tax season.
The compulsory logbook
To claim a tax deduction, the taxpayer must present a valid SARS logbook. This is a strict legal requirement; without it, SARS rejects the deduction entirely.
The logbook must record the vehicle's exact odometer reading on 1 March (the start of the tax year) and again on the last day of February (the end of the tax year). For every single business trip, the logbook must detail:
- the date of travel
- the distance travelled in kilometres
- the destination (where the trip went)
- the specific business reason for the trip
Commuting is private travel
A critical rule in South African tax law is that driving from a person's home to their normal place of work is classified as private travel, not business travel.
An employee cannot claim a deduction for their daily commute to the office, even if they live far away. Business travel only counts when driving from the office to a client, between different work sites, or from home directly to a client's premises.
Two ways to calculate the claim
At the end of the tax year, the employee uses their logbook to calculate their final deduction against the travel allowance. They can use one of two methods:
- the actual-cost method: the taxpayer adds up every real expense for the year, including fuel, maintenance, insurance, licence fees, and vehicle finance interest. They must keep all physical receipts. These total costs are then multiplied by the business-use percentage (business kilometres divided by total kilometres).
- the deemed-cost method: SARS publishes an annual table that assigns a fixed cost, a fuel cost, and a maintenance cost based purely on the original purchase value of the car. The taxpayer simply applies their logged business kilometres to this SARS formula, meaning they do not need to keep a shoebox full of fuel receipts.
The reimbursive alternative
Instead of paying a fixed monthly allowance, an employer can choose to reimburse an employee directly for the exact business kilometres they drive.
For the 2026/2027 tax year, SARS allows employers to pay a reimbursive travel rate of up to R4.95 per kilometre completely tax-free. If the employer reimburses the employee at this rate or lower, the money is not taxed at all, though it must still be reported on the IRP5 certificate.
Terms used on this page
- Tax Season
- The annual SARS filing window — roughly July to October for most people, and to late January for provisional taxpayers — for the tax year that ended the previous February.
- odometer
- The instrument on a vehicle's dashboard that measures the total distance the vehicle has travelled over its lifetime.
- reimbursive travel allowance
- A payment where an employer pays an employee a set rate for each business kilometre actually driven, rather than a fixed monthly amount.
- IRP5
- The tax certificate an employer submits to SARS (and gives to you) showing your pay and the PAYE deducted. It is the main data behind an auto-assessment.
Sources
Reviewed July 2026