Travel allowances driving you mad? Do this to manage them more effectively
Do you feel your employee's travel allowance is a constant nightmare?
Do you struggle to tax it correctly or workout what he used for private travel?
Are you worried SARS will slap you with massive fines if you don't get this?
Stop! You don't have to panic about travel allowances anymore.
You just have to change one small thing in the way you manage it to help you make the process less stressful...
Here's what you should do to effectively manage your employee's travel allowance
Your employee must have a logbook. This isn't just for SARS; it's for you too. You should check your employee's logbook at the end of every month.
This will help you accurately track his use of his travel allowance each month and determine what his tax liability on it is, if any.
You can also track the way he uses his travel allowance to see if he uses it for private travel or mostly business.
To determine these things, check all this information…
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Check this information in your employee's logbook
Always check your employee's private travel kilometres. This is important because this is what he must pay fringe benefit tax on.
Look at his total business kilometres, fuel and maintenance costs. This will help you check how much of his travel allowance he used for that month, as well as how much is left that must become part of his taxable income.
Lastly, check the date and reason for the travel to verify he was actually on business travel at the time he says he was.
By doing this monthly logbook check, you can manage your employee's travel allowance more effectively.
PS. Find out how to save R26 983 by keeping an accurate logbook
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