Company Management – Payroll Definitions - Reimbursive Travel Allowance

 IRP5 Code Summary: 

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

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.

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.