If you are a work traveler or an employee managing travel expenses, you might wonder about the SARS subsistence allowance. It can be confusing for some people to understand the ins and outs of subsistence allowance. Moreover, it is the amount of money given to an employee to cover travel expenses.
A subsistence allowance is also taxable, and therefore you need to understand how its local and international allowance and SARS taxes work. So, continue reading this blog to get insight into the SARS subsistence allowance.
A subsistence allowance is money given to an employee who is on a work trip for personal and incidental costs like meals and drinks, etc. Furthermore, this means you will get a certain fixed amount of money you must spend during your trip. Moreover, you do not usually have to show proof of your expenses; however, some employers can ask about the receipts, and you must show them because they have the right to ask.
SARS Subsistence Allowance
Now that we have a basic understanding of what subsistence allowance is let’s proceed toward SARS-deemed subsistence allowance. SARS has deemed a certain rate for incidental costs for both local and international trips. Furthermore, it is only applicable based on per night the employee stays away from home.
Local SARS Deemed Subsistence Allowance
The local and international allowance rate differs, and it changes every year. Moreover, the updated rates for a few of the years are given below.
|Year||Meals and incidental subsistence allowances per day||Incidental allowance only|
International SARS Deemed Subsistence Allowance
The international deemed costs are different from local. Furthermore, it varies from one country to another. Here are some of the famous international destinations’ rates;
|Year||United Kingdom||United States of America||United Arab Emirates|
|2019||GBP 102||US $ 155||AED 699|
|2020||GBP 102||US $146||AED 699|
|2021||GBP 102||US $146||AED 699|
Additionally, the meals and incidental costs are determined under Notice 268, published in Government Gazette No. 42258, dated March 2019. Furthermore, the deemed rate is the ‘tax-free rate,’ which means that you can deduct the deemed rate from your income if it matches. This will make your net allowance zero.
How is SARS Subsistence Allowance Taxed?
This amount is also taxable, and you will be taxed on the amount you did not spend. Moreover, during your trip, the amount that is left from the deemed amount during the work trip and is not paid to your employer will be taxed, including your income.
Additionally, you need to be aware of the fact that this tax is only calculated at the end of the year when you submit your annual tax return for assessment. SARS will not deduct it from the income tax in the month you receive the allowance.
In a nutshell, the SARS subsistence allowance is the amount of money an employee receives to cover meals and incidental costs. Furthermore, SARS has set a deemed subsistence allowance which is different for local and international trips. Moreover, the amount left from spending during the trip is taxable by SARS.