Travel Allowance Scheme Information

Travel Allowance Scheme Information

If you receive a travel allowance, we’ll help you make the most cost-effective vehicle finance choice with the most tax-effective solution.  

Every car scheme presents different alternatives for individual employees as well as for your company. Our comprehensive car allowance information to employers and employees cover:

  • Vehicle selection and affordability
  • Evaluation of tax implications for each employee
  • Resale of vehicles at optimum prices at the end of the finance contract
  • On-going information to employees and employers as circumstances and needs change

Travel Allowance Tax Treatments

Instalment Sale

When you finance a car through a Vehicle Instalment Sale Agreement, you are entitled to claim depreciation loss of the vehicle and finance charges against the allowance that you earn.

For claim deductions on wear and tear and the loan costs, you must make your calculations using the 'Actual Cost' formula when claiming for business travel deduction.  This entails that you keep accurate records and details of business travel expenses that show the reasons for travel and the distances covered.

SARS allows for the deduction of finance charges and wear and tear at 20% per annum against travel allowance income.

Financial Lease

When you finance a car through a Vehicle Lease Agreement, you are entitled to claim depreciation loss of the vehicle and finance charges against the allowance that you earn.

For claim deductions on wear and tear and the loan costs, you must make your calculations using the 'Actual Cost' formula when claiming for business travel deduction.  This entails that you keep accurate records and details of business travel expenses that show the reasons for travel and the distances covered.

SARS allows for the deduction of the monthly payment (including balloon payment) against travel allowance income.

Operating Rental

As an allowance receiver with an Operating Rental and Maintenance Plan, you’re entitled to claim the sum of the repayments plus other motoring costs such as insurance and maintenance against your allowance earned.

For claim deductions on these costs, you must make your calculations using the 'Actual Cost' formula when claiming for business travel deduction.  This entails that you keep accurate records and details of business travel expenses that show the reasons for travel and the distances covered.

SARS allows for the deduction of the monthly rental (including balloon payment) against travel allowance income.

As a guide you can calculate your estimated running costs and determine the Perks Tax on your particular car scheme option.