How a travel allowance is taxed in SA (2026/27)
Figures for the 2026/27 tax year. Prime rate checked 9 October 2026; tax tables and fees checked 30 September 2026. By AfroTech.
A fixed travel allowance is extra pay for using your own car for work. SARS taxes it as income, but lets you deduct what your business travel costs, worked out from a logbook. Most people with real business travel pay too much PAYE during the year and get some back when they file.
PAYE during the year
Your employer adds 80% of the allowance to your taxable pay each month. If it's satisfied that at least 80% of your travel is for business, it can tax only 20%. On a R 6 000 monthly allowance with a R 30 000 salary, that makes PAYE R 6 073 a month.
The deduction when you file
On assessment, SARS taxes the whole allowance, less your business travel at a rate per kilometre. The rate comes from SARS's cost scale for your vehicle's value (what you paid, including VAT but not finance charges):
- Fixed cost: the yearly amount for your vehicle's value band, divided by the total kilometres you drove (business and private).
- Fuel: added if you pay for all your fuel.
- Maintenance: added if you pay for all repairs, services and tyres.
For a car that cost R 400 000, driven 30 000 km in the year, that's R 125 393 ÷ 30 000 km = R 4,18, plus 173,4 cents for fuel and 74,0 cents for maintenance: R 6,65 a kilometre. With 10 000 business kilometres, the deduction is R 66 538.
What it's worth
| Vehicle cost | Rate per km | Deduction | Refund |
|---|---|---|---|
| R 200 000 | R 4,38 | R 43 809 | R 9 117 |
| R 400 000 | R 6,65 | R 66 538 | R 15 281 |
| R 600 000 | R 9,15 | R 72 000 | R 16 701 |
| R 900 000 | R 11,38 | R 72 000 | R 16 701 |
R 6 000 allowance and R 30 000 salary a month, 30 000 km a year of which 10 000 km business, you pay all fuel and maintenance, PAYE on 80% of the allowance. Under 65, 2026/27.
The deduction can't be more than the allowance. Without a logbook there's no deduction at all, and the whole allowance is taxed: in this example you'd owe SARS about R 4 464 more than PAYE took.
Keeping a logbook
- Record every business trip: the date, where you went, why, and the kilometres.
- Write down the odometer reading at the start and end of the tax year (1 March and the end of February).
- Driving between home and your usual workplace is private, not business.
- You can claim your actual costs instead of the rate per kilometre, if you keep every receipt.
Try it with your own numbers. The ZARWise calculator uses the same figures as this page.
Work out your travel allowance refund