Company Car Tax Calculator South Africa

With a travel allowance, you own the car and receive a fixed monthly amount from your employer. You can deduct business travel costs to reduce the taxable portion. With a company car (fringe benefit), your employer provides the vehicle and you pay tax on a deemed monthly value based on the cost of the car.

The fringe benefit is calculated at 3.5% of the determined value (cost including VAT) of the vehicle per month. If the vehicle is subject to a maintenance plan, the rate is reduced to 3.0% per month. The private use portion of this amount is added to your taxable income.

Keep a detailed logbook of all business and private kilometres. Without a logbook, SARS deems 80% of use as private. With an accurate logbook showing higher business use, you can reduce the private use percentage and therefore the taxable amount significantly.

If you do a lot of business travel (high business kilometres), a travel allowance is usually more tax-efficient because you can deduct a larger portion. If your business travel is low, a company car may be simpler as the employer handles all vehicle costs and you just pay tax on the fringe benefit.

Yes, the determined value of the vehicle includes VAT. The 3.5% (or 3.0% with maintenance plan) is calculated on the full cost of the vehicle including VAT, as this represents the total cost to the employer.