An important rule when it comes to your employee's travel allowance is, he must keep a logbook. This is something you've probably told him before, but do you know why?
If you don't understand why he has to keep a logbook, how can you expect him to understand this process?
That's why we're revealing three very important reasons why your employee must keep an accurate logbook...
Ensure your employee knows these three reasons why he must keep an accurate logbook
Reason #1: Without an accurate logbook to prove your employees business travel, he's an easy target for SARS penalties. SARS wants to see proof of his expenses when your employee submits his tax return. Without a logbook, he can't prove his travel expenses are legitimate and this means SARS will penalise him.
Reason #2: When SARS assesses him, it merges the amounts against codes 3702 (reimbursement of travel expenses) and 3701 (travel allowance). And it asks the employee to substantiate his business travel.
Without a logbook, your employee won't be able to do this.
Reason #3: His full travel allowance will become part of his taxable income, and SARS will tax it accordingly if he can't prove his expenses are legitimate.
These three reasons make it very clear why your employee needs to have an accurate logbook. Speaking of accuracy, his logbook must contain the following information...
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Get 69 solutions to the most challenging company car and travel allowance questions
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.
Your employee's logbook must have this information in it
• Date of travelling;
• Opening kilometers;
• Closing kilometers;
• Private kilometers;
• Business kilometers;
• Business travel details (where, reason for visit, etc.);
• Actual fuel cost and oil cost; and
• Actual repairs and maintenance cost.
There you have it. Make sure your employee knows these three reasons why he must have a logbook that contains the right information.