Two Tax Regimes, Two Very Different Rules
When South African independent contractors ask about travel deductions, most of the guidance they find online is written for employees. The rules are not the same, and conflating them causes errors in either direction — under-claiming because you didn't realise the full deduction is available, or over-claiming in ways that don't survive scrutiny.
An employee who receives a travel allowance from an employer operates under section 8(1)(b) of the Income Tax Act. Eighty percent of the allowance is added to taxable income upfront, and the employee then claims actual business kilometres against it. This is a gross-up mechanism that intentionally limits the benefit for employees who don't drive significant business distances.
An independent contractor is not an employee, and does not receive a travel allowance. There is no gross-up. Business travel costs are deductible directly as an expense under the general deduction provision in section 11(a), subject only to the usual requirement that the expense is actually incurred in the production of income. Section 23(m) — the provision that prevents employees from claiming most business expenses beyond what their employer reimburses — does not apply to independent contractors.
This means a freelancer can claim the full business-use proportion of their vehicle costs without the structural disadvantage employees face. Getting the calculation right, however, requires the same discipline: a logbook.
What Counts as Business Travel
Business travel is travel undertaken in the performance of your trade. For most freelancers and contractors, this includes:
- Travel to a client's premises for meetings, site visits, or on-site work
- Travel to suppliers or professional advisers directly related to your business
- Travel to attend industry conferences or CPD events you are required to attend
- Travel between multiple client sites on the same day
Commuting between your home and a fixed regular office does not qualify — even if the office is your primary place of work. There is an exception: if you have a qualifying home office under section 23(b), and you travel from your home office to a client site, that travel can be treated as business travel because you are departing from a recognised place of business.
Personal travel that touches on work — stopping at a client site on the way to a family event — is still personal travel. Splitting a trip by km is acceptable only where the detour is genuinely identifiable and separately logged.
The Logbook: What SARS Requires
A compliant logbook is the non-negotiable foundation of any travel deduction. Without it, the claim falls on review regardless of how accurate your estimate might be — SARS will not accept reconstructed records prepared at filing time.
Each entry must record:
- Date of the trip
- Starting and ending odometer readings for the day (or each trip if making multiple business trips in a day)
- Destination (street address or client name is sufficient)
- Purpose of the trip (meeting with [client], site inspection, etc.)
- Distance driven for that trip
At year-end, you also need total odometer readings for 1 March and 28 February to establish your total annual kilometres. The difference between business km (from the log) and total km (from the odometer) gives you the private portion.
SARS accepts digital logbooks — a spreadsheet, a logbook app, or a dedicated vehicle logbook software — as long as records are maintained throughout the year. A summary reconstruction done in May is not contemporaneous and will not satisfy an audit.
Two Calculation Methods
Once you have a logbook, you choose one of two methods and apply it consistently:
Method 1: Actual Cost
You claim the actual costs of operating the vehicle, multiplied by the business use ratio:
Business use ratio = Business km ÷ Total km for the year
Actual costs include:
- Fuel and oil
- Maintenance and tyres
- Insurance premiums (business proportion)
- Vehicle licence and registration
- Finance charges (interest on a vehicle loan — not capital repayments)
- Wear and tear under section 11(e) — SARS applies a 20% annual rate on the cost of a passenger motor vehicle, meaning a vehicle costing R350,000 generates a wear-and-tear allowance of R70,000 per year, with the business portion then deducted
If you use a vehicle costing R400,000, use it 60% for business, and total running costs (fuel, maintenance, insurance, finance) plus wear and tear amount to R120,000 for the year, your deductible amount is R72,000.
The actual cost method requires keeping all receipts and maintaining a proper asset register entry for the vehicle. It is generally more favourable for financed vehicles, older high-maintenance vehicles, and where business use is below 50% of total km.
Method 2: SARS Approved Rate
SARS publishes an approved rate per kilometre each year in the Government Gazette. You multiply your business km by this rate and claim the result — no receipts for individual running costs required.
The simplicity is the main advantage. The trade-off is that the approved rate reflects average running costs and does not account for expensive vehicles, high maintenance, or finance charges. For contractors with relatively new, heavily financed vehicles, the actual cost method almost always produces a larger deduction.
Once you choose a method for a vehicle in a tax year, you apply it for the full year. You cannot switch between methods mid-year.
The Private Use Apportionment
Both methods require you to establish the private/business split. This is where errors most commonly occur. If your logbook shows 18,000 business km out of 28,000 total km for the year, your business proportion is 64.3%. That proportion applies to your actual costs under Method 1, and is the multiplier already embedded when you use Method 2 (since you only claim the km you drove for business).
Where contractors create audit risk is in treating every km as business travel. SARS analysts look for logbooks where the business percentage is implausibly high — 95% or above — for a vehicle that also appears to be the household's only car. A consistent, believable split that matches your trading pattern is more defensible than a maximised figure that doesn't hold up when cross-referenced with your client list and home address.
Declaring on Your ITR12
On the ITR12, vehicle and travel expenses are claimed on Schedule C (trade and professional income). You include them in the total business expenses line for your trade income. There is no separate schedule for travel — it sits inside the ordinary business expenditure disclosure alongside other deductions like home office costs, professional subscriptions, and equipment.
Keep your logbook and all receipts for at least five years from the date of the relevant assessment. SARS has five years from the date of assessment to raise a query, and the burden of proof in any dispute sits with you.
What Triggers an Audit
Travel deductions come up frequently in SARS verifications. The patterns that attract attention include:
A business use ratio above 90% for a vehicle that also shows personal registration address and is the taxpayer's only vehicle. Travel km claimed that significantly exceed what the stated client base and business activities would reasonably generate. Fuel costs that are inconsistent with the km driven at standard consumption rates. A logbook submitted at the point of query that shows suspiciously round km figures and identical daily entries.
None of these trigger an audit by themselves, but they are the markers SARS analysts are trained to flag. A genuine logbook maintained throughout the year doesn't exhibit these patterns naturally.