Page 9 - Nexia Cape Town 2018 TG Digital

Employees’ tax is based on 80% of the travel allowance. However, if the employer
is satisfied that at least 80% of the use of a motor vehicle will be for business
purposes, employees’ tax may be based on 20% of the travel allowance.
When the following criteria are met, no employees’ tax is payable on a
reimbursive travel allowance paid by an employer to an employee:
Description 2017 2018 2019
Maximum distance travelled for business 8 000 12 000 *
purposes per annum:
Maximum rate per kilometre paid (cents): 329 355 361
* This figure has not been confirmed at time of publication
This alternative is not available if other compensation in the form of a travel
allowance or reimbursement (other than for parking or toll fees) is received from
the employer in respect of the vehicle. In such an instance the reimbursive travel
allowance will be taxable and expenditure for business travel could be claimed in
the same manner as with a normal travel allowance.
Right of use of motor vehicle
When an employee receives the right to use a motor vehicle the following
provisions apply:
■ Where the vehicle is owned by the employer, the taxable value is 3,5% of
the determined value (Vehicles purchased before 1 March 2015: The cash
cost including VAT; Vehicles purchased on/after 1 March 2015: Retail
market value) per month of each vehicle. Where the vehicle is the subject of
a maintenance plan at the time that the employer acquired the vehicle the
taxable value is 3,25% of the determined value.
■ Where the vehicle is rented by the employer, the monthly taxable value is
equal to the actual costs incurred by the employer under the lease (rental
and insurance for example) as well as the cost of fuel for the vehicle.
■ 80% of the fringe benefit must be included in the employee’s remuneration
for the purposes of calculating PAYE. The percentage is reduced to 20% if the
employer is satisfied that at least 80% of the use of the motor vehicle for the
tax year will be for business purposes.
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