Summary
Description
From March 2018, the taxation of reimbursive travel allowance changed, it requires that the portion of all kilometres reimbursed at a rate, greater than the prescribed rate per kilometre, be included in remuneration and is therefore subject to PAYE. This value must also be included in remuneration for the purposes of UIF, SDL, ETI and remuneration used to calculate the allowable tax deduction limit for contributions towards a retirement fund. Please note that the prescribed fixed rate per kilometre by the Minister of Finance is R4.84 from from March 2024.
Resolution
IRP5 Code Summary:
IRP5 Code  Description 
3702  • This code is used if an employee is reimbursed at a rate greater than the prescribed rate per km, and/or • The employee received any other form of compensation for travel. The portion of the reimbursive travel allowance that does not exceed the amount determined by multiplying the prescribed rate per km with the business kilometres travelled, should be reported against code 3702. This value is not remuneration but will be assessed by SARS. 
3722  This code is used if an employee is reimbursed at a rate greater than the prescribed rate per km. The portion of the reimbursive travel allowance that exceeds the amount determined by multiplying the prescribed rate per km with the business kilometres travelled, should be reported against code 3722, which is the remuneration portion. Code 3722 must be used together with code 3702. 
3703  This code is used if an employee is reimbursed at a rate equal to or less than the prescribed rate per km, and • the employee does not receive any other form of travel compensation. Code 3703 may not be used together with code 3701, 3702 and/or 3722. This value is not remuneration and is not assessed by SARS. 
3701  An allowance or advance paid to an employee in respect of travelling expenses for business purposes. The taxable portion (20%, 80% or 100%) is included in 4582.

NOTE: Note: Values for code 3702, 3722 and 3701 (if applicable) will be added on assessment and the employee must claim his/her business travel expenses against the total amount
The following 3 scenarios will now be applied upon submission for reimbursive travel allowance values .
1. The number of kilometres travelled, and the rate paid per kilometre is captured on the unit detail line.
2. Values captured in the amount column on the unit detail line to reimburse the employee instead of the number of kilometres and the rate per kilometre.
3. The earning definition is still linked to a calculation and the entire reimbursive amount is reflected in the fixed column without the number of kilometres and the rate paid per kilometre.
Changes Upon Submission:
These scenarios are only applicable if the year of assessment is 2024/2025 or greater.
No changes will take place within the Sage 300 application; the conversion will only take place within the IRP5 file to ensure correct reporting of IRP5 codes.
Scenario 1:
The number of kilometres travelled, and the rate paid per kilometre are captured on the unit detail line
Kilometers  100 kms 
Rate per Km  R5.00 
Amount Captured  R0.00 
Amount Linked to a calculation  R0.00

Total value  R500.00

SARS perscribed rate per Km for 2020/2021  R 4.84

IRP5 Codes 

3702  R 484.00 
3722(remuneration portion)  R 16.00

Scenario 2:
Values captured in the amount column on the unit detail line to reimburse the employee instead of the number of kilometres and the rate per kilometre.
If values are captured in the amounts column, the Sage 300 People application cannot apply the calculation as in scenario 1 to determine what portion of the amount is remuneration (i.e. what portion exceeds the prescribed rate per km), therefore, the full amount is included in remuneration and subject to PAYE, UIF, SDL and ETI (if applicable). Since the full amount is remuneration, 100% of the value will be reported as a travel allowance on code 3701 and 100% will be included in code 4582
NOTE: According to the definition of ‘remuneration’ as defined in paragraph 1 of the Fourth Schedule to the Income Tax Act, only he portion of reimburse travel allowance that exceeds the amount determined by multiplying the prescribed rate per km with the business kilometres travelled, should be included in remuneration. Therefore, this is not an advisable option to process reimbursive travel allowance, because the system cannot apply the the correct calculation to calculate the correct remuneration portion.
Field  Not Supplied 
Rate per Km  Not Supplied 
Amount Captured  R 500.00 
Amount Linked to a calculation  R0.00

Total value  R500.00

IRP5 Codes 

3701  R 500.00 
If you do not wish to include the full value in remuneration and report it against code 3701 then please contact your Sage 300 consultant to make the necessary corrections.
Scenario 3:
The earning definition is still linked to a calculation and the entire reimbursive amount is reflected in the fixed column without the number of kilometres and the rate paid per kilometre. If this option is used, Sage 300 People will assume that the kilometres are reimbursed at a rate equal to or less than the prescribed rate per kilometre, therefore code 3703 will be used. If the employee has a value for 3701, then code 3702 will be used. Note: This is not an advisable option.
Field  Not Supplied 
Rate per Km  Not Supplied 
Amount Captured  R 0.00 
Amount Linked to a calculation  R 500.00

Total value  R500.00

SARS perscribed rate per Km for 2020/2021  R4.84

IRP5 Codes 

3703  R 500.00 