6. Summary of the Main Aspects of Travel Reimbursements
The following are the main aspects of a travel reimbursement:
1. Employees who qualify for a travel reimbursement in terms of section 8(1)(b)(iii) are those who:
a. Travel for business purposes (with a valid driver’s licence),
b. In a motor vehicle that is privately-owned.
2. The employer:
a. Must set the rate/km for travel reimbursements in its travel policy
b. May only pay a travel reimbursement to ‘qualifying’ employees
c. Must process the travel reimbursement through the payroll
d. Must allocate the correct tax certificate codes depending on the rate/km used
e. Must report the travel reimbursement correctly on the tax certificate.
3. The employee:
a. Must claim his business travel in accordance with the employer’s policy and procedures
b. Should maintain a business travel logbook to be in a position to claim business travel expenses
c. Should claim business travel expenses if there is taxable income by submitting his logbook details.
Note that a reimbursement for travel expenses is only a travel reimbursement if its value is calculated by:
• Multiplying the number of business kilometers travelled
• By a rate per kilometre.
Any other type of compensation paid by the employer in relation to the vehicle or the travel is either a travel allowance, or a normal reimbursement of an employer’s business expense incurred by the employee, or an additional payment to assist an employee with private travel costs (fully taxable with no deduction allowed).