1. Michelle Bernard Ari Swanepoel
TAX
Michelle Bernard
Ari Swanepoel

2. TRAVEL ALLOWANCE (LU 3)
Employer & Employee relationship

3. I give you a TRAVEL ALLOWANCE = R75 000py BUSINESS USE
10 000km for the year
BUSINESS USE
PRIVATE USE

4. Determined Value Business kilometres Private kilometres
INCLUDING VAT
Business kilometres
Private kilometres
How much of the costs relate to business km’s travelled?

5. NOTHING HOW TO DETERMINE YOUR DEDUCTION NOTHING NOTHING NO LOGBOOK
NO RECORDS
LOGBOOK
NO RECORDS
LOGBOOK
RECORDS
DEEMED COSTS
R/km
Fixed Cost per km
Fuel
Maintenance
NOTHING
YES! Per table
YES! Per table
ACTUAL COSTS
Rands
NOTHING
NOTHING
YES! Actuals
Full travel allowance deemed for private use = fully taxable!
Travel allowance less business km’s = private km’s taxable
Travel allowance less business km’s = private km’s taxable

6. Other possible costs in questions
Travel Allowance = Full year
Employee owns vehicle
Other possible costs in questions
Vehicle is financed
DEEMED COSTS
R/total km
Fixed cost per km
Fuel
Maintenance
Per table based on determined value
Per table based on determined value
Per table based on determined value
ACTUAL COSTS
Rands
Wear & tear
Fuel
Maintenance
TOTAL
R / total km’s
Tyres – Yes!
Insurance – Yes!
Licence fees – Yes!
Determined value / 7
Capital repayments –
not allowed
Actual costs
Finance charges – Yes!
Maintenance plan – No!
Speeding fines – prohibited!

7. Question M receives a travel allowance of R75 000 for the year
M kept accurate logbook and accurate record of expenses
Cost of the vehicle = R (VAT inclusive)
Business km’s = km Private km’s = km
Fuel for the year = R30 700
Insurance & licence fees for the year = R16 900
Maintenance covered by maintenance plan for the year = R6 000
Capital repayments for the year = R12 200
Finance charges for 5yrs = R

8. Suggested solution Highest Business km’s = 11 200km
Private km’s = km
TOTAL km’s = km’s
Determined value = R (incl VAT)
DEEMED COSTS
Calcs
R/total km
Fixed cost per km
/ km
459,02
Fuel
146,0
Maintenance
68,4
Highest
= R6,734 per km
ACTUAL COSTS
Calcs
Rands
Wear & tear
R /7
68 571
Fuel
30 700
Maintenance
Not paid by employee
Insurance&licence
16 900
Capital repayments
Not allowed
Finance charges /5
23 220
TOTAL
Cost per km
= R /
= R4,774 per km

9. Taxable income Travel allowance 75 000
R R
Travel allowance
Less business travel (R6,734 x km) = (75 421)
(421)
Taxable fringe benefit - limited to travel allowance

10. Question - adjusted
M receives a travel allowance of R for 60 days
M kept accurate logbook and accurate record of expenses
Cost of the vehicle = R (VAT inclusive)
Business km’s = km Private km’s = km
Fuel for the year = R30 700
Insurance & licence fees for the year = R16 900
Maintenance covered by maintenance plan for the year = R6 000
Capital repayments for the year = R12 200
Finance charges for 5yrs = R

11. Suggested solution Highest Business km’s = 11 200km
Private km’s = km
TOTAL km’s = km’s
Determined value = R (incl VAT)
DEEMED COSTS
Calcs
R/total km
Fixed cost per km
/29 200km x 60/365
0,87
Fuel
150,9
Maintenance
84,9
Highest
= R2,367 per km
ACTUAL COSTS
Calcs
Rands
Wear & tear
R /7 x 60/365
13 973
Fuel
30 700
Maintenance
Not paid by employee
Insurance&licence
16 900
Capital repayments
Not allowed
Finance charges
R /R x /5 x 60/365
3 663
TOTAL
65 236
Cost per km
= /
= R2,234 per km

12. Taxable income Travel allowance 75 000
R R
Travel allowance
Less business travel (R2,367 x km) = (26 510)
48 490
Taxable fringe benefit

13. EMPLOYEE’s TAX Learning Unit 9
Remember this is a monthly tax withheld by the EMPLOYER on behalf of the employee
Employer will not know what the total kms travelled for the year is!
80% ; 20% Rule
Include 80% of the travel allowance
R x 80% = R taxable fringe benefit