By Chris Herbst, Chartered Business Accountant in Practice (CBAP) with CIBA, General Tax Practitioner (GTP) with SAIT, Stellenbosch University. Team registered with SAIT, SAIPA and CIBA.
If your employer pays you a monthly car or travel allowance, your IRP5 shows the amount next to code 3701. PAYE is withheld on part of it during the year, and your ITR12 is where the business travel in your logbook is claimed against it. Without that claim, the allowance stays in your taxable income. This guide explains what code 3701 covers, how much of it is taxed through PAYE, how the claim is calculated and how to complete the travel section on eFiling.
What Is SARS Code 3701 on an IRP5?
Code 3701 is the source code for a travel allowance. The SARS guide for codes applicable to employees tax certificates describes it as an allowance or advance paid to an employee for travelling expenses for business purposes, including fixed travel allowances and petrol, garage and maintenance cards. The guide marks it as subject to PAYE and requires 100% of the value paid to be shown on the certificate.
What is code 3751?
Code 3751 is the same allowance where it relates to foreign services income. The codes guide states that 3751 is used only for foreign services income, so most South African employees see 3701.
Does a petrol card count as a travel allowance?
Yes. The codes guide places petrol, garage and maintenance cards under code 3701 alongside fixed allowances. This affects your claim, because the fuel and maintenance rates only apply to costs you carried in full yourself.
Does a vehicle let to my employer count?
Yes. Where you, your spouse or your child owns or leases a vehicle and it is let to the employer, the SARS guide for employers in respect of allowances deems the rental plus any vehicle costs the employer carried to be a travel allowance. The guide states that the rental is declared as a travel allowance and not as rental income.
How Much of Code 3701 Is Taxed Through PAYE?
Your employer withholds PAYE on 80% of the allowance. The allowances guide reduces this to 20% where the employer is satisfied that at least 80% of the use of the vehicle for the year will be for business purposes. The SARS rates per kilometre page states the same two percentages.
Who decides between the 80% and 20% inclusion?
Your employer does. The allowances guide requires the determination to be made monthly. If circumstances change and the vehicle will no longer be used at least 80% for business, PAYE moves to 80% of the allowance from the month of the change.
Is the PAYE percentage the final tax on the allowance?
No. The percentage only sets what is withheld during the year. The final figure is worked out when SARS assesses your ITR12: the full allowance on your IRP5 is compared with the business travel you substantiate, and only the excess remains taxable. The PAYE already withheld is credited against your tax on the same assessment, which you can read on your ITA34 notice of assessment.
Why might I owe SARS after claiming?
An amount is due on assessment when your business travel is lower than the percentage your employer assumed. For example, PAYE on 20% during the year with a logbook that shows far less than 80% business use leaves tax to pay. The reverse also applies: where PAYE ran on 80% and your logbook supports a larger claim, the extra PAYE reduces what you owe or comes back as a refund.
How Does Code 3701 Differ From the Other Travel Codes?
The code on your IRP5 depends on whether you receive a set allowance, a reimbursement per kilometre or a company car. The SARS comprehensive guide to the ITR12 lists the travel source codes as 3701, 3702, 3703 and 3722, each with a foreign services equivalent.
- 3701: What it is: Fixed travel allowance; Tax effect: PAYE on 80% or 20%
- 3702: What it is: Reimbursement with other compensation; Tax effect: Up to prescribed rate, no PAYE
- 3703: What it is: Reimbursement at or below prescribed rate; Tax effect: Non-taxable, no claim
- 3722: What it is: Reimbursement above prescribed rate; Tax effect: Excess is subject to PAYE
- 3802: What it is: Company car fringe benefit; Tax effect: Taxable benefit, not an allowance
What is the prescribed rate per kilometre?
The prescribed rate is R4.95 per kilometre from 1 March 2026, as stated in the allowances guide and the SARS rate per kilometre schedule. The allowances guide gives this example: an employer pays R5.95 per kilometre for 1,000 business kilometres, so R4,950 goes under code 3702 and R1,000 under code 3722.
What happens if I receive both 3701 and a reimbursement?
SARS combines them on assessment. The allowances guide states that a travel allowance paid together with a reimbursive allowance is treated as a taxable travel allowance, and that you claim the travel deduction on your return. The ITR12 guide adds that an amount under 3703 becomes taxable on assessment when it is used together with 3701 or 3702.
What if I have a company car instead?
A car owned by your employer falls under a different code and a different calculation. Our guide to SARS code 3802 explains the fringe benefit and how a logbook reduces it. On the return, the two claims are separate questions.
How Do You Claim Business Travel Against Code 3701?
You claim on your ITR12 using a logbook, and you choose between actual expenses and the SARS fixed cost table. The ITR12 guide states that SARS calculates the deduction programmatically from the vehicle and kilometre details you enter, and that the claim is limited to the amount of the allowance.
Actual expenses or the fixed cost table: which should I use?
Use actual expenses if you kept receipts for the full year. The ITR12 guide lists fuel and oil, maintenance and repairs, insurance and licence fees, wear and tear or lease payments, finance charges and other costs. If you did not keep records of actual expenses, SARS applies the fixed cost table. Compare both before you file, because the difference depends on your vehicle value and how many kilometres you travel.
How does the fixed cost table work?
The rate per kilometre is the sum of three parts, set out in the rate per kilometre schedule. The first is the fixed cost for your vehicle value divided by your total kilometres for the year. The second is the fuel rate, where you carried the full cost of fuel. The third is the maintenance rate, where you carried the full cost of maintenance. That rate is multiplied by your business kilometres.
What does a worked example look like?
Take a vehicle that cost R400,000, driven 30,000 kilometres in total with 15,000 business kilometres, a full year of use and all running costs carried by the employee. For the year ended 28 February 2026, the ITR12 guide table gives a fixed cost of R111,273, fuel of 191.4c and maintenance of 71.4c. The fixed cost per kilometre is 370.91c, the total rate is 633.71c and the claim is R95,056.50. With an allowance of R120,000, the excess of R24,943.50 stays taxable.
What changed in the table for the 2027 year?
The value bands moved. For years of assessment commencing on or after 1 March 2026, the schedule places a R400,000 vehicle in the band from R345,000 to R460,000, with a fixed cost of R125,393, fuel of 173.4c and maintenance of 74.0c. Use the table for the year you are filing, because the two years give different results on the same kilometres.
Can I claim fuel if I use a petrol card?
No. The SARS rates per kilometre page states that no fuel cost may be claimed if you have not carried the full cost of fuel, and no maintenance cost may be claimed if you have not carried the full cost of maintaining the vehicle, for example where a maintenance plan covers it. The fixed cost part of the rate still applies.
What are the limits on actual expenses?
The ITR12 guide limits three items. Wear and tear runs over seven years on a cost limited to R920,000 from 1 March 2026 and R800,000 from 1 March 2023. Lease payments may not exceed the fixed cost for the vehicle category, and you may claim lease payments or wear and tear on a vehicle, not both. Finance charges are limited to what would have been incurred on a debt of the same capped amount.
What is the vehicle value for the table?
For a vehicle you bought, it is the original cost including VAT and excluding finance charges and interest, as the rate per kilometre schedule states. For a financial lease it is the cash value. In any other case it is the market value when you first obtained the vehicle or the right to use it, plus VAT on that value.
What Logbook Does SARS Accept for Code 3701?
SARS requires a record of your actual business kilometres, and the ITR12 guide states that you must have a logbook to claim business travel deductions. SARS offers a free travel e-logbook, but the record you keep only has to carry the required details.
What must the logbook show?
The ITR12 guide sets these minimum details:
- Opening kilometres at the start of the tax year, or when business use began
- Closing kilometres at the end of the tax year
- The date of each trip
- The destination to and from
- The kilometres travelled
- The reason for the travel
How long must I keep the logbook?
Five years after the date you submit the return, as the ITR12 guide states. Keep your receipts for the same period if you claim actual expenses, because the guide applies the same five years to proof of expenses.
Does driving to work count as business travel?
No. The ITR12 guide treats travel between your place of business and your residence as private, and the allowances guide says the same of travel between your residence and your place of employment. If you conduct your business from home, the guide treats your home as your place of business for trips from there. Our home office guide covers that separate claim.
Do I need a logbook for Uber or the Gautrain?
No vehicle logbook is needed where you have no vehicle and use public transport for business. The ITR12 guide opens source code 4015 for these costs when your IRP5 shows 3701, 3702 or 3722, and the claim may not exceed the sum of those codes. You still keep proof of payment and a record of the date, the reason and who you visited.
Which Tax Year Does the Allowance Belong To?
An allowance belongs to the year of assessment in which it is paid. The allowances guide treats these payments as variable remuneration under section 7B of the Income Tax Act 58 of 1962, and the ITR12 guide states that the related business distance is deemed to have been travelled in that same year.
What if I am reimbursed in the next tax year?
The travel moves with the payment. The ITR12 guide gives this example: travel in January and February 2024 reimbursed in April 2024 falls in the 2025 year of assessment and is claimed on the 2025 ITR12. The kilometres linked to that reimbursement are removed from the closing kilometres on the 2024 logbook and carried over.
How Do You Complete the Travel Section on eFiling?
You open the travel section through the questionnaire on the ITR12, then enter your vehicle, kilometres and expenses. The steps below follow the ITR12 guide.
- On your ITR12 wizard, mark the question that you want to claim a tax deduction for your travel allowance if you kept a logbook, and enter the number of vehicles used. If you used more than five, the guide directs you to contact SARS.
- Check that your IRP5 shows the amount next to code 3701 in the income section of the return.
- Answer Y to the question "Did you use a logbook to determine your business kilometres travelled?". Selecting N clears and locks the remaining fields.
- Under vehicle details, select Purchase Agreement or Lease Agreement, then enter the registration number, make, model, date of purchase and cost price or cash value.
- Under kilometres, enter the starting and closing dates, the opening and closing odometer readings, total kilometres and business kilometres from your logbook.
- Under travelling expenses, enter your actual costs for the year, or leave them out so that SARS applies the fixed cost table.
- Read the assessment and check the travel deduction against your own calculation. Keep your logbook ready, because SARS can request it, for example in a verification.
What documents should I have ready?
Have your IRP5, your logbook, the vehicle purchase or lease agreement and, for actual costs, your receipts. Our documents checklist for your tax return covers the rest of the return.
What if SARS disallows my travel claim?
You can lodge an objection to the assessment on eFiling, with your logbook and records as support. Our guide to the SARS notice of objection sets out the steps.
What Are the Common Mistakes With Code 3701?
Most errors come from the logbook or from the fuel and maintenance rates. These are the ones to check before you submit:
- No logbook. Without one, the travel deduction is not available and the allowance stays in your taxable income.
- Counting the commute as business. Home to work is private travel, and it stays out of your business kilometres.
- Claiming fuel on a petrol card. The fuel rate only applies where you carried the full cost of fuel.
- Claiming maintenance on a car with a maintenance plan. The maintenance rate only applies where you carried the full cost.
- Using the wrong vehicle value. The value is the original cost including VAT, excluding finance charges, not today's market value.
- Not pro-rating part-year use. The fixed cost reduces in line with the days of business use out of 365.
- Checking your claim against the wrong year's table. The bands and rates changed from 1 March 2026.
- Treating a reimbursement as paid in the year travelled. It belongs to the year it was paid.
Do You Need Help With SARS Code 3701?
Travel claims are worth checking against both methods before you file, particularly with a large allowance or a change of vehicle during the year. We prepare and file ITR12 returns for clients across South Africa. See our personal tax pricing, browse more personal tax guides or book a call.
