food allowance

Photo: Pixabay

SARS ups amount you can claim for work-related food and travel expenses

If you are required to travel for work, recent changes made by Finance Minister Tito Mboweni will affect your tax return for 2020/2021.

food allowance

Photo: Pixabay

In effect from 1 March 2020, adjusted guidelines used by the South African Revenue Service (SARS) have introduced a 10% increase for work-related expenses.

Published in the Government Gazette, two of the major updates are for vehicle claims and occasional expenses, such as meals, when travelling. 

Tax-free claim of R452 per day

The maximum tax-free claim for work-related occasional expenses, such as food, has increased to R452 per day.  When food is provided by the hotel or guesthouse for example, the limit for incidental costs now stands at R139 per day. 

The amount that can be claimed for work-related travel with private vehicles has increased from R3.61/km to R3.98/km. This adjusted amount does not include additional parking or toll fees.

These changes only pertain to domestic travel. 

According to Business Insider, the amounts differ depending on the country being visited, and are calculated in their local currency.

“For example, for travel in the United Kingdom, South Africans can claim a maximum amount of £102 (R2 121) per day, in the United States a maximum of $146 (R2 398), and in France a maximum of €128 (R2 358).”

Subsistence allowance

The online national human resources directory HR Works explains that these sorts of expenses form a subsistence allowance that protects employees.

“Subsistence allowance recognises 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.”

Follow these guidelines to ensure your tax return is accurate:

  • 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;
  • 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; and
  • 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. They may then reimburse you for such costs incurred. Such costs may include accommodation, meals and incidental costs.