Subsistence allowance recognizes the fact that when you are away from home on business, that there are expenses that you incur but you cannot claim for on your tax return.
The intention of a subsistence allowance is to reimburse you for such costs. A subsistence allowance that is paid at the correct rates is tax-free. However there are a number of buts:
- You can only qualify for the receipt of a tax-free subsistence allowance if you spend at least one night away from home on business.
- You may claim an amount of R286 per day that you are away from home on local travel (in South Africa). This rate of R286 per day is intended to cover meals and incidental costs.
- If your employer covers the cost of meals on local travel – then you may claim a daily subsistence allowance of R88 to cover incidental costs incurred.
- There are different rates for overseas travel. Each country has its own rate (download rates here)
- These rates are intended to cover meals and/ or incidental costs.
- The subsistence allowance may never be taken as a salary sacrifice. It must be paid out as additional to salary. It does not form part of your basic salary.
- Subsistence allowance must be shown on your IRP 5 certificate.
- Should you not wish to use the daily subsistence rates mentioned above, then you must submit proof of the actual costs incurred by yourself to your employer. He may then reimburse your for such costs incurred. Such costs may include accommodation, meals and incidental costs.
If in any doubt please consult your tax advisor or contact :
Vicki Taylor : 021 5567887
Ian Hurst
Email : This email address is being protected from spambots. You need JavaScript enabled to view it. Cell: 082 898 5006
