SARS Updates Prescribed Rate per Kilometre for 2026 Year of Assessment
Brought to you by SA Accounting Academy: In terms of section 8(1)(b)(ii) and (iii) of the Income Tax Act, No. 58 of 1962, the Commissioner for the South African Revenue Service (SARS) has issued Notice 7182 in Government Gazette 54228, fixing the rate per kilometre in respect of motor vehicles.
The notice increases the simplified tax-free reimbursement rate from R4.76 to R4.95 per kilometre. This revised rate is effective for years of assessment commencing on or after 1 March 2026. This rate is applicable where an employee is reimbursed for business travel and no other allowance or advance is paid, provided the business distance travelled does not exceed the limits prescribed by the Commissioner.
The fixing of the rate per kilometre is a standard annual or biennial adjustment intended to align the tax-free reimbursement threshold with the changing costs of vehicle ownership and operation, including fuel prices and maintenance costs.
Click here to download Notice 7182: Fixing of rate per kilometre in respect of motor vehicles.
What this means for you, your business, or your clients
- For yourself: Ensure your personal travel logbooks for the period commencing 1 March 2026 reflect the updated rate of R4.95 for any simplified reimbursement claims submitted to your employer.
- For your business: Update payroll systems and internal travel reimbursement policies to align with the R4.95 per kilometre rate for the 2026/27 financial year to ensure compliance with the Income Tax Act.
- For your clients: Advise clients on the adjustment to the tax-free threshold to ensure they are maximizing tax-efficient travel compensation and maintaining correct records for SARS audits.
Originally published at https://accountingacademy.co.za/news/read/new-sars-tax-free-rate-per-km-3