Pastel Payroll - Travel Allowance Help

[TravisZA]

I'm trying to process a travel allowance on an employee's payslip for actual petrol expenditure reimbursed to the employee. I've tried using transaction code 5501 Travel Allowance 1 in the Income tab of the payslip but it doesnt seem to calculate the PAYE on the amount (should be taxed at 80% of the value as I understand it)

Any help?

[CLIVE-TRIANGLE]

I don't think that is the correct code to use. That code will translate to SARS code 3701

You should rather use whichever translates to 3702 or 3703, depending on if SARS rates were exceeded, because reimbursive allowance is either fully taxed, or not at all.

[Mike C]

I think you should be using code 5540 in Pastel Payroll. Up to 8000 km at R3.18 per km is allowable for this tax year. Anything over that is taxable.

[TravisZA]

I don't think that is the correct code to use. That code will translate to SARS code 3701

You should rather use whichever translates to 3702 or 3703, depending on if SARS rates were exceeded, because reimbursive allowance is either fully taxed, or not at all.

I don't think so. As I understand it any travel expenses paid or reimbursed (other than for actual business kilometres travelled) are regarded as a travel allowance and should be taxed at 80% for PAYE under code 3701.

A reimbursive allowance for business travel would go to 3702 or 3703

T

[TravisZA]

I think you should be using code 5540 in Pastel Payroll. Up to 8000 km at R3.18 per km is allowable for this tax year. Anything over that is taxable.

Not sure thats the correct code either. We are reimbursing actual expenditure (total) not just business.

[Mike C]

Unless it is a fixed travelling allowance, you might need to then split it into Business and Private using two different codes.

[CLIVE-TRIANGLE]

This might help

http://www.sars.gov.za/FAQs/Pages/70.aspx

[TravisZA]

My question isnt which code to use, my question is that when I allocate the income to code 5500 or 5501 the PAYE number calculated by Pastel doesnt change. I.e. deduction of PAYE is based only on the basic salary amount.

[Mike C]

Ok - sorry for the misunderstanding. You need to add code 6026 together with 5501 for it to work correctly.

[TravisZA]

Ok - sorry for the misunderstanding. You need to add code 6026 together with 5501 for it to work correctly.

Thanks Mike, I think thats exactly what I need to do - but how?

Do I include R1,000 on the income tab under 5501 and then R1,000 on the benefits tab under 6026??

[Mike C]

Hi Travis - it has been a while since I did this but I think that you just enter the amount under 5501 and it automatically does the calculation for 6026.

[TravisZA]

Hi Travis - it has been a while since I did this but I think that you just enter the amount under 5501 and it automatically does the calculation for 6026.

Hi, yeah thanks - I wasnt using the "Default tab" - thats the key - all working 100% now. Appreciate the help.