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Do you know what the correct reimbursement rate for travel allowances is?

by , 02 July 2014
Travel allowances are always a bit of a sticky point. Some employers find the whole process so frustrating that they try to scrap the allowance all together.

That's why a reimbursement travel allowance is the better way to go. It's less frustrating because you only have to pay your employees back for their travel expenses.

This removes the stress of working out the income tax on unused travel allowances.

But you do have to ensure you use the correct reimbursement rate if you choose this option...

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Here's how to ensure you reimburse your employees' travel expenses according to the right rates

 
There's some confusion about what the current reimbursement rates are. This because these change from year-to-year depending on several factors.
 
Every year the Minister of Finance sets these rates in his national budget speech. 
 
But one of the biggest points of confusion is who these rates apply to. 
 
So here are the current travel reimbursement rates and who they apply to...
 

Here are the 2014 reimbursement rates and who they apply to

 
The reimbursement rate for 2013 and 2014 is R3.24 per kilometre. This rates applies to any of your employees who have to travel for business. Whether your employee travels everyday or occasionally, you must still reimburse him using this rate. 
 
You'll work the reimbursement out by multiplying the rate by the distance travelled. 
 
So if your employee travelled 87 km you'll multiply R3.24 by 87km and reimburse them R281.88 for their travel costs. 
 
And remember, if they travel less than 8 000km during the tax year, you don't have to declare the reimbursement as a fringe benefit.
 
On the other hand, if your employee travels more than 8 000km, it's taxable, but it isn't subject to employees' tax.
 
So there you have it: Ensure you reimburse your employees correctly for their travel expenses. 
 
 
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