10. An amount that is determined based on the employee’s work performance (from 1 March 2023).
Kilometers that are reimbursed and that are travelled towards the end of February, accrue in February.
If the employee uses the company credit card for fuel in February (a travel allowance amount), it also accrues in February.
Being variable remuneration, both travel allowances and travel reimbursements are now taxed when they are paid (March in this scenario) thereby reducing the employer’s tax year-end administration burden considerably.
In terms of the employee’s logbook, the kilometers that underly the travel allowance or travel reimbursement amount that is deemed to accrue in a month after the month in which the kilometers were travelled, the kilometers ‘move with the money’ and must be allocated in the employee’s logbook to the deemed month of accrual.
Outdated practice: Standardisation of Private kilometers
This is a good point to discuss a practice that some employers have applied for many years, apparently ‘approved’ by some SARS officials in earlier years, but this is only heard of from the employers who were applying this practice, not from SARS.
Some employers record the distance from the employee’s home to the place of employment and use this as a ‘standard’ number of private travel kilometers for every working day.
Then if the employee travelled from home directly to a client’s business premises and from there to the workplace, the number of kilometers travelled in total was reduced by the number of ‘standard’ private travel kilometers and only the remaining kilometers were regarded as business travel kilometers.
This practice of Standardisation of Private kilometers is not allowed – it is outdated, defies logic, and is unfair to the employee.