How are different expense categories treated in South Africa for reimbursement?

In South Africa, expense categories are treated in various ways for reimbursement, and many have specific requirements regarding taxability.

Taxable Categories

Mobile Phone and Internet: Employees may receive a monthly mobile/data allowance or claim business usage. The allowance itself is taxable in the hands of the employee.

Wellness and Healthy Lifestyle: Personal wellness, lifestyle, fitness, and similar expenses are not considered business expenses under the South Africa policy and are therefore fully taxable if reimbursed.

Per Diem Allowance: Pebl does not support Per Diem allowance in South Africa.

Personal Insurances: Personal insurance policies—unless legally required and clearly linked to the employee’s role—are not business expenses and, if reimbursed, will generally be treated as taxable income/benefits.

Expenses with Special Requirements

Mileage: The reimbursement rate for business use of a private motor vehicle is a flat ZAR 4.76 per kilometer. If the rate paid to the employee exceeds the SARS-prescribed rate, the excess may constitute a taxable benefit.

Gifts: Approved client gifts may be reimbursed; however, gifts that are not clearly for client business purposes (e.g., personal gifts) may be treated as taxable benefits to the employee.

Non-Taxable Expenses

These include transportation, airfare, public transport, car rentals, accommodation, subsistence during business travel (with receipts or approved per diem), client and staff entertainment, computer / other movable equipment used wholly for business, office stationery, professional association fees required by law or employment, foreign currency commissions and small exchange-related differences, and job-related training costs—provided they are directly work-related, properly approved, and supported with the required documentation.

For all expense types, proper documentation such as VAT-compliant invoices or other supporting documents is required for reimbursement, ensuring the expenses are directly related to the business activity and meet South African tax requirements.