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Subsistence Allowances and Advances: What You Need to Know for 2025

Subsistence Allowances and Advances: What You Need to Know for 2025

As we step into the fiscal year of 2025, it’s time to take stock of the latest updates in subsistence allowances and advances. Approved by the Minister of Finance and outlined in Section 8(1) of the Income Tax Act No. 58 of 1962, these adjustments are crucial for both individuals and businesses navigating the realm of tax obligations.

The Commissioner for SARS has meticulously determined the daily expenditure rates for meals, accommodation, and travel costs, both domestically and abroad, for the year ahead. These determinations, enacted under Section 8(1) of the Income Tax Act, serve as guidelines for taxpayers to understand their permissible expenses and exemptions.

Let’s delve into the specifics of the changes for the 2025 year of assessment:

Domestic Allowances:

For individuals required to spend a night away from their usual residence for business purposes within South Africa, the approved allowances stand as follows:

Meals and Incidental Costs: R548 per day

Incidental Costs Only: R169 per day

Comparing these figures to the previous year’s rates reveals a modest increase, indicating adjustments in line with economic shifts and inflation.

Moreover, for individuals obligated to spend a portion of the day away from their usual workplace, reimbursement or advances for incurred expenses remain exempt, provided they fall within the prescribed limits:

Expenditure for Meals and Incidental Costs: Up to R169 per day

These allowances aim to alleviate the financial burden associated with work-related travel, ensuring that individuals can conduct business efficiently without facing undue financial strain.

In essence, these allowances and advances serve as vital mechanisms for individuals and businesses, facilitating smooth operations while remaining compliant with tax regulations. Contact PRNC for the latest updates and guidelines for you to effectively manage your finances and fulfil your obligations without unnecessary complications.

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