By Adam Dierselhuis
With the reduction in the Tax Office cents per kilometre rate to 66c/km from 1 July 2015 (should the legislation be passed), you may like to re-assess the per km rate you will adopt from that date onward, should you reimburse your employees on a cents per kilometre basis for any business travel made by them in their own car.
If you continue with your existing approach / reimbursement levels – there will be a requirement to withhold tax on the excess paid to employees over the 66c/km level from 1 July 2015. Regardless of the level of reimbursement paid, such reimbursements will continue to be reportable as an allowance on your employee’s group certificate.
Rather than introduce more complexity into your payroll system from 1 July 2015, now might be the time to revise your cents per kilometre reimbursement policy.