4. Last thoughts on Travel Compensation
There are good reasons to use travel reimbursements in your company –
1. The employer controls the rate/km (and therefore the eventual cost to the employer)
2. Depending on the rate/km used, the travel reimbursement is excluded from remuneration, whereas the travel allowance and company car add to the company’s total remuneration amount.
3. Using a travel reimbursement lowers the employer’s costs of the SDL and UIF contribution costs – depending on the numbers, this could result in a substantial saving for the employer.
4. There is no confusion in the minds of employees or employers that this is the employer’s business expense, and that it simply does not belong in a package.
The only downside of the travel reimbursement is that the employer must administer the claim forms for the reimbursements, but as suggested earlier, using spreadsheets for the business travel claims can simplify and reduce administration for both the employer and the employee.
5. Proposals to Change the Travel Compensation Legislation
Travel compensation legislation has been changed over the years to close loopholes and to keep up with the changing nature of employment.
It remains a difficult area for employers, employees, SARS, and legislators.
For several years the PAGSA has proposed that the policymakers consider phasing out travel allowances over a few years, to be replaced by travel reimbursements.