SARS Updates Prescribed Tax-Free Rate per Kilometre for 2026

Posted 02 March 2026 Written by Acts Online
Category Tax

Brought to you by SA Accounting Academy: The South African Revenue Service (SARS) has revised the prescribed rate per kilometre for motor vehicle travel, effective from 1 March 2026.

In terms of section 8(1)(b)(ii) and (iii) of the Income Tax Act, No. 58 of 1962, the Commissioner has issued Notice 7182 in Government Gazette No. 54228. This notice fixes the rate per kilometre in respect of motor vehicles for years of assessment commencing on or after 1 March 2026.

The simplified tax-free rate has been increased to R4,95 per kilometre, representing an increase from the previous rate of R4,76 per kilometre. This rate is used to determine the portion of a travel allowance or advance that is not included in the taxable income of an employee, provided that the distance travelled for business purposes does not exceed the prescribed limits and no other compensation is received for the use of the vehicle.

Click here to download the 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 that any personal travel claims for the tax year starting 1 March 2026 utilize the updated R4,95 rate for accurate tax reporting in your personal capacity.
  • For your business: Update payroll and accounting software to reflect the R4,95 rate for all travel reimbursements processed on or after 1 March 2026 to ensure correct PAYE withholding.
  • For your clients: Inform clients of the R0,19 per kilometre increase to ensure their travel allowance policies and reimbursement structures remain tax-efficient and compliant with the Income Tax Act, No. 58 of 1962.

Originally published at https://accountingacademy.co.za/news/read/new-sars-tax-free-rate-per-km-2

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