South Africa – Subsistence & Travel Allowance Thresholds March 2024
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South African Revenue Services (SARS) issued updated guide for employers in respect of allowances. Effective from 1st March 2024, the thresholds for exemption on allowances are mentioned below.
Changes in thresholds for Subsistence Allowance
When the employee spends a part of a day away from his usual place of work, domestic per diem mentioned below is exempt from income tax.
| Allowance | 2024 Domestic (ZAR) | 2023 Domestic (ZAR) | 2024 Foreign (ZAR) | 2023 Foreign (ZAR) |
|---|---|---|---|---|
| Only incidental cost exempt from income tax | 169 | 161 | Prescribed rate * | Prescribed rate * |
| Meal and Incidental cost exempt from income tax | 548 | 522 | Prescribed rate * | Prescribed rate * |
* SARS has prescribed foreign per diem in respect of each country effective from March 2024 under annexure “PAYE-GEN-01-G03-A02”.
Income code for IRP5/IT3(a):
| Scenario | Local Travel | Foreign Travel | Reimbursement |
|---|---|---|---|
| Payment exceeds the threshold | 3704 (total amount is reported) | 3754 (total amount is reported) | 3713 (the part which is subjected to tax is reported) |
| Payment does not exceed the threshold | 3714 | 3764 | NA |
Changes in thresholds for Travel Allowance
For travel allowance, the following two situations are envisaged, namely-
- A fixed travel allowance given to an employee.
- A reimbursement given to an employee based on actual business travel.
| Allowance | March 2024 (in ZAR) | March 2023 (in ZAR) | Income Code IRP5/IT3(a) |
|---|---|---|---|
| Fixed travel allowance exempts from tax | 20% | 20% | 3701 |
| Fixed travel allowance subjects to tax (Note: When employer is satisfied that at least 80% of the use of the motor vehicle will be for business purposes, then only 20% of the allowance is subject to tax) | 80% | 80% | 3701 |
| Reimbursement at per km exempts from tax | 4.84 | 4.64 | 3702 |
| Reimbursement at per km subjects to tax | Amount above the threshold | Amount above the threshold | 3722 |
| Exemption from tax when reimbursement is not more than threshold and no other compensation is paid (travel allowance) | 100% | 100% | 3703 |
Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change
Employer of Record (EOR) South Africa | PEO South Africa | Payroll in South Africa
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