How a Subsistence Allowance Is Taxed in South Africa

A subsistence allowance for a night away from home on business is not taxed up to a deemed daily amount set by SARS, and you do not need receipts to reach that amount. For the 2026 year of assessment (1 March 2025 to 28 February 2026), the deemed amount for local travel is R570 per day for meals and incidental costs, or R176 per day for incidental costs only. Anything your employer pays above the deemed rate is taxable unless you prove your actual spend.

This sits in section 8(1)(c) of the Income Tax Act. It is a separate mechanism from the travel allowance in section 8(1)(b), which deals with the running cost of a vehicle. Subsistence covers meals, drinks and small out-of-pocket costs while you are away overnight for work.

What counts as a subsistence allowance

A subsistence allowance (or advance) is an amount an employer gives an employee who has to spend at least one night away from their usual place of residence on the employer's business. The deemed-amount rule applies where the travel is inside South Africa. It does not apply to home-to-work commuting, day trips with no overnight stay, or a personal holiday tacked onto a work trip.

Two conditions do the work here. First, you must be away from home for business. Second, you must be away for at least one night. When both hold, SARS lets a set daily figure stand in for what you are deemed to have spent, so no receipts are needed up to that figure.

The deemed daily amounts (2026 year of assessment)

For local travel, the amount deemed to have been spent per day is:

What the allowance covers	Deemed amount per day (2026 YoA)
Meals and incidental costs	R570
Incidental costs only	R176

"Incidental costs" are the small items such as a drink, a tip, or a newspaper, as distinct from a proper meal. The R176 figure is the one to use when the employer already pays for or provides your meals separately, so the allowance is only meant to cover the incidentals.

Up to the deemed amount, the allowance is not subject to tax and you do not have to account for actual expenditure. If the employer pays more than the deemed amount, the excess is taxable and goes through PAYE, unless you can prove you actually spent the higher amount on subsistence.

Worked example: three nights away, R700 per day

Suppose your employer sends you to a client in another city and you are away for three nights on business. The employer pays a subsistence allowance of R700 per day, and you buy your own meals.

Because you buy your own meals, the meals-and-incidental deemed amount of R570 per day applies. Work it through:

• Deemed (not taxed): R570 x 3 days = R1,710
• Total allowance paid: R700 x 3 days = R2,100
• Excess above the deemed amount: R2,100 − R1,710 = R390

So R1,710 is not taxed and needs no receipts. The remaining R390 is taxable and subject to PAYE, unless you keep proof (slips or a card statement) showing you actually spent at least R700 per day on subsistence. If you can prove the full spend, the R390 is not taxed either.

Now change one fact. Say the employer books and pays for all your meals directly, so the allowance is only for incidental costs. The deemed amount drops to R176 per day:

• Deemed (not taxed): R176 x 3 days = R528
• If the allowance were, say, R250 per day: R250 x 3 = R750 paid
• Excess above the deemed amount: R750 − R528 = R222 taxable, unless actual incidental spend is proven

The arithmetic runs the same way; what changes is which deemed figure applies. Where the employer provides the meals, you use the R176 rate, so more of a generous allowance ends up taxable.

Subsistence allowance is not a travel allowance

These two are often confused because both can appear on the same trip. A travel allowance under section 8(1)(b) compensates you for the running cost of using your own vehicle for business, and it is claimed against a compulsory logbook of business kilometres. A subsistence allowance under section 8(1)(c) compensates you for meals and incidentals while away overnight. You can receive both on one trip: the travel allowance for the driving, the subsistence allowance for the nights away.

If your question is really about the vehicle side, the travel allowance tax guide sets out the logbook rules and the PAYE split, and the travel allowance calculator works out the deductible portion from your kilometres. For allowances given as cash for a phone or data, see how a cellphone and internet allowance is taxed, and for an employer-provided vehicle rather than an allowance, see the company car fringe benefit.

Foreign business travel

For travel outside South Africa, the deemed daily amount is set per country in an annexure that SARS publishes each year. It is a table of country-specific figures, not a single rate, so the amount for a trip to one country differs from another. Use the current SARS foreign-travel annexure for the destination rather than the local R570 or R176 figures, which apply to travel inside the Republic only.