Travel Allowance vs Reimbursement: Which Is Better for You?

If your job requires you to drive for work, your employer will structure your vehicle costs one of two ways — a travel allowance or a reimbursive travel allowance — and the tax treatment of each is different enough that it's worth understanding before you assume you're being taxed correctly.

Travel allowance (fixed monthly amount)

A travel allowance is a set amount added to your salary every month (e.g. R5,000), regardless of how much you actually drove. SARS treats this as 80% taxable by default — your employer withholds PAYE on 80% of the allowance upfront. At tax filing time, you claim back the portion that reflects your actual business travel, based on a logbook.

The deduction is calculated using either:

• Actual costs (fuel, maintenance, insurance, wear and tear) apportioned by business-kilometres driven, or
• The SARS-prescribed rate table, which for 2025/2026 sits around R4.84 per business kilometre for most vehicle categories (the exact rate depends on the vehicle's value band).

Reimbursive travel allowance (paid per kilometre)

Here your employer pays you a rate per kilometre actually driven for business purposes, based on a logbook you keep throughout the year — no fixed monthly amount, no assumption. If the rate your employer pays is at or below the SARS-prescribed rate (currently R4.84/km) and you drove fewer than 12,000 business kilometres in the year, the whole reimbursement is usually tax-free — it doesn't even appear as taxable income. If your employer pays above the prescribed rate, only the excess is taxed.

When the logbook is mandatory

For a travel allowance (the fixed monthly type), a logbook is compulsory if you want to claim anything back — without one, SARS treats the full amount as a taxable allowance with no offsetting deduction, which is the worst possible outcome. Your logbook needs, at minimum: the date of the trip, kilometres travelled, and the business purpose. Retrospectively reconstructing a year's logbook from memory in October is a bad idea and one of the most common reasons SARS rejects a travel claim.

Which one is actually better?

If you drive a predictable amount for work every month, a reimbursive allowance at the SARS rate is usually simpler and more tax-efficient — you're taxed on nothing extra. A fixed travel allowance makes more sense if your business travel varies significantly month to month, since it smooths out your cash flow, but it depends entirely on you keeping a proper logbook to get the tax benefit at filing time.

Upload your logbook (or export from a tracking app) along with your IRP5, and Tax Chommie calculates the deduction using the correct SARS rate automatically — no manual lookup tables required.