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How should petrol cards be treated for tax purposes?

15 April 2015   (2 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A company is giving travel allowances to employees (taxed), but also supplies them with petrol cards. These petrol cards are used for private and business travel. Should they be taxed as fringe benefits? My opinion is that the portion used on the petrol card for private travel should be a fringe benefit, while the other used for business travel should be added to travel allowance.

A: In our view the petrol card merely represents a variable travel allowance per s8(1)(b) ITA and the amount used by the employee during any month should be added to the fixed travel allowance under IRP5 code 3701. The PAYE should be determined per the Fourth Schedule based on the anticipated business use and the employee will then have to claim against the allowance on assessment by providing relevant supporting information including a proper logbook.

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision.


Gerhardus M. Maritz says...
Posted 22 February 2017
Can an employee have both a travel allowance and a fuel card?
Gerhardus M. Maritz says...
Posted 22 February 2017
I have a situation where the payroll was adjustment with the fuel usage being added to backpay in the system, therefore the full tax is being paid as if is added to salary. My problem is that is not correct, it should be added to the travel allowance. If the travel allowance is then to great for the annual claim from the logbook then it needs to be reduced.



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