Per-kilometre and daily travel amounts without PAYE
SARS's per-kilometre rate and daily travel amounts at the time of writing, when PAYE applies to them, and how to run staff travel claims through payroll.
By Achekam · · 4 min read · For Running a business businesses in South Africa
A sales rep drives her own car to see clients in three towns, stays away for the week, and hands in a claim for kilometres and meals. The business wants to pay it back fairly, without turning a straightforward reimbursement into a payroll tax problem.
SARS publishes the figures that make this possible: a rate per kilometre and daily amounts for meals and incidental costs on business travel. Pay within them and the treatment is simple; pay above them and part of the payment becomes taxable. This guide sets out the figures at the time of writing, the rules around them, and how to run claims through payroll so each one is approved and repaid properly.
The prescribed rate per kilometre
SARS's guide for employers on allowances says the prescribed rate for a reimbursive travel allowance is R4.95 per kilometre from 1 March 2026, and that any amount paid above that rate is subject to employees' tax. The SARS guide for employers in respect of allowances sets out that rate alongside the subsistence amounts and the rules for each kind of allowance; check it each tax year, because the figures change.
In practice, a reimbursement works like this. The employee keeps a record of business kilometres travelled in their own vehicle. The business pays the business distance at no more than the prescribed rate. SARS's guide is explicit that anything paid above the rate is subject to employees' tax, and it explains how employers treat the rest of a travel reimbursement, which is worth reading before you rely on the rate for a particular employee. Keep the logbook with the claim: it is the evidence that the kilometres were business kilometres at all.
Paying above the prescribed rate
Some employers pay more per kilometre than the prescribed rate, perhaps because the employee drives a larger vehicle or the business simply wants to be generous. That is allowed, but SARS's guide is clear that the amount above the prescribed rate is subject to employees' tax. The payroll treatment then has two parts: the amount at the prescribed rate, and the excess, which is taxed.
A related point catches some businesses out. SARS's guide says rental an employer pays for a vehicle owned or leased by the employee, the employee's spouse or child is deemed to be a travel allowance, not rental income. Calling the payment "rent" for the employee's car does not change its tax treatment. If you are paying a regular amount for an employee's vehicle rather than reimbursing actual kilometres, read the travel allowance and PAYE before you set it up.
Deemed daily amounts for meals and incidental costs
When staff travel on business within South Africa, SARS's allowances guide says the amounts deemed spent are:
| What the daily allowance covers | Deemed amount per day |
|---|---|
| Incidental costs only | R184 |
| Meals and incidental costs | R595 |
These are the figures at the time of writing. SARS notes that the rates for each tax year are published in the Government Gazette, so confirm them before each new year starts.
The deemed amounts help in two ways. They give the business a reference point for setting a daily allowance, and they give the employee a figure SARS deems to have been spent on the trip.
No PAYE on subsistence allowances
The guide adds a point that surprises many payroll administrators. It says employees' tax must not be deducted from a subsistence allowance, even where the deemed amounts or periods are exceeded.
So a daily allowance paid for business travel is not run through PAYE, even if it is generous. That does not make every amount tax-free in the employee's hands; it means the payroll does not withhold tax on it. Record the allowance accurately, with the dates and purpose of the trip, so that it can be reported correctly.
Claims through self-service, approved by someone else
The cleanest reimbursement process is one where the claim, the approval and the payment are all on record. In Achekam, a staff member whose login is linked to their payroll record can submit expense claims through self-service, along with leave applications and changes to their details, for payroll to decide. Staff claims are approved by someone other than the person claiming, and an approved claim is repaid on the next pay run.
Pay runs can be monthly, fortnightly or weekly, and each period's allowances and reimbursements are entered as variable inputs, alongside overtime, commission and unpaid leave. That keeps travel payments in the same run as salaries, rather than in a separate stream of transfers nobody reconciles. Agree with your payroll adviser how each kind of payment is set up, so that any taxable excess is taxed and subsistence allowances are not. Bureaus handling these inputs for clients can see variable inputs in a payroll bureau.
A claim checklist for managers
Before approving a travel claim:
- Is there a logbook or route record showing business kilometres?
- Is the rate per kilometre at or below the prescribed rate, and if not, is the excess flagged as taxable?
- Are daily allowances linked to specific travel dates and a business purpose?
- Is any regular "rental" for the employee's car being treated as a travel allowance?
- Is the claim going through payroll, approved by someone other than the claimant?
Set your travel policy against SARS's figures once a year, when the new rates are gazetted. Every claim after that is a matter of checking it against the policy.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
