South Africa | Payroll Amendments

The 2025 Budget Speech is now scheduled for 12 March 2025, when updates, including the personal income tax tables, will be announced. However, some payroll-related changes based from recently published legislation have already gone into effect as of March 1, 2025.

Legislative Amendments

The Taxation Laws Amendment Act, 2024 and the Tax Administration Laws Amendment Act, 2024 were published on 24 December 2024 in Government Gazette Nos. 51826 and 51827. These amendments introduce the following payroll-related changes to the Income Tax Act and the Employment Tax Incentive Act:

• Addition of paragraph 2(4)(g) to the Fourth Schedule: Permits section 11(nA) tax deductions for refunds made within the same tax year.
• Update to the definition of ‘Remuneration Proxy’ in section 1: Aligns the definition with that of an associated institution in the Seventh Schedule.
• Addition of section 5(3) to the Employment Tax Incentive Act: Introduces further measures to curb the abuse of the Employment Tax Incentive (ETI).

SARS Income Tax Notices

SARS has issued three new Income Tax Notices:

• GG 52199 Notice 5936: Fixing of the rate per kilometre for motor vehicles – Section 8(1)(b)(ii) and (iii).
• GG 52199 Notice 5935: Determination of the daily amount for meals and incidental costs for overnight travel – Section 8(1)(c)(ii).
• GG 52199 Notice 5934: Determination of the daily amount for meals and incidental costs for daily travel – Section 8(1)(a)(ii).

Key updates on travel reimbursements for businesses:

• Motor vehicle reimbursement rate: Decreased from R4.84 to R4.76 per km.
• Subsistence allowance for South Africa travel:
  • R570 per day or part of a day (up from R548) for meals and incidentals (i.e., drinks, lunch, parking etc.).
  • R176 per day or part of a day (up from R169) for incidentals only (i.e., non-meal-related costs such as parking etc.).
• Reimbursements/advances for day trips: R176 per day (up from R169) for meals and incidentals.
• These updated rates affect how employers compensate employees for business travel expenses.

We will keep you informed and share an updated version of the document once additional amendments are announced after the Budget Speech on 12 March 2025.

Refer to the attached document for a detailed explanation of the amendments: South Africa Tax Amendment Acts 2025-26.pdf