If you give your employees a travel allowance, they MUST keep this one thing
A travel allowance is the sum of money you give your employee to cover his business travel costs. For example, you give him money to cover the costs of driving to and from client meetings.
Many employers give their employees a travel allowance because travelling is an important part of the business.
If you're one of these employers, there's one thing you need to tell your employees to keep.
Without this one thing, you'll invite SARS audits, and what's worse is your employees won't be able to substantiate their travel claims.
Don't take that risk.
Keep reading to discover one thing your employees must keep if you give them a travel allowance.
Get 69 solutions to the most challenging company car and travel allowance questions
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If you don't know the answers to questions like:
How often your employees should hand in their logbooks?
If you're required to pay Vat on a company car your employee wants to buy?
How to calculate travel allowances correctly to avoid being head hunted by SARS?
If you can claim input tax on a vehicle you use for company purposes?
You're not only wasting unnecessary hours of time, but could also be making mistakes that SARS will hunt you down for.
Be on the safe side and get 69 solutions to the most challenging company car and travel allowance questions.
Revealed: What your employees must keep if you give them a travel allowance
If you give your employees travel allowances
, you must tell them to keep an accurate logbook so they can substantiate their travel claims. Without a logbook, your employees can't claim a deduction.
In fact, in this article
, we explain that if your employees don't keep an accurate logbook, they could end up having to fork over a lot of tax
on assessment. And if you structure a travel allowance or reimburse employees for travel, but don't ask them for the logbooks to prove their travel, you're exposing your business to a high risk of penalties and interest.
You must explain to your employees that when SARS assesses them, it merges the amounts against codes 3702 (reimbursement of travel expenses) and 3701 (travel allowance). And it'll ask them to substantiate business travel. Without a logbook, they won't be able to do this. Their full travel allowance will be included into their taxable income, and taxed accordingly!
So teach them about the importance of having an accurate logbook and make sure they update their logbooks daily and keep them safe.
For more information on logbooks and travel allowances, check out the Practical Tax Loose Leaf Service
PS. Find out how to save R26 983 by keeping an accurate logbook