Calculating Vehicle Deductions

How vehicle logbook deductions are calculated for SARS.

Overview

If you receive a travel allowance, SARS allows you to claim a deduction based on your business travel. ProcessX calculates this automatically using SARS-approved methods.

Who Can Claim?

You can claim vehicle deductions if you:

Receive a travel allowance from your employer
Use your personal vehicle for business
Keep a proper logbook

If your company provides a company car, different rules apply (fringe benefit).

Calculation Methods

SARS allows two methods. See the official travel allowance guide for full details.

1. Actual Cost Method

Calculate the actual cost of running your vehicle:

Then multiply by business percentage:

Total costs: R 116,200
Business use: 60%
Deduction: R 69,720

2. Deemed Cost Method (SARS Rates)

Use SARS prescribed rates based on vehicle value:

2024/2025 SARS RatesNote: Rates are updated annually by SARS. Check the latest rates.

Deemed Cost Calculation

Step 1: Determine Vehicle Value

Use the original retail value (including VAT).

Step 2: Find Applicable Rates

Look up rates based on vehicle value from the SARS tables.

Step 3: Calculate Total Cost

Annual Cost = Fixed Cost + (Fuel Rate × km) + (Maintenance Rate × km)

Step 4: Apply Business Percentage

Deduction = Annual Cost × Business Use Percentage

Example Calculation

Using 2024/2025 rates for R285,001 - R380,000 bracket:

Fixed Cost: R 103,501
Fuel: 20,000 km × R1.659 = R 33,180
Maintenance: 20,000 km × R0.601 = R 12,020
Total: R 148,701

Business portion: R 148,701 × 60% = R 89,221

Deductible amount: R 89,221

Which Method is Better?

Cost Type	Annual Amount
Fuel	R 36,000
Insurance	R 12,000
Maintenance	R 8,000
License fees	R 1,200
Finance charges	R 24,000
Depreciation	R 35,000
Total	R 116,200
Vehicle Value	Fixed Cost/Year	Fuel Cost/km	Maintenance Cost/km
Up to R95,000	R30,871	120.9c	43.6c
R95,001 - R190,000	R55,081	135.9c	49.1c
R190,001 - R285,000	R79,291	150.9c	54.6c
R285,001 - R380,000	R103,501	165.9c	60.1c
R380,001 - R475,000	R127,711	180.9c	65.6c
R475,001 - R570,000	R151,921	195.9c	71.1c
R570,001 - R665,000	R172,131	210.9c	76.6c
Over R665,000	R172,131	210.9c	76.6c
Factor	Value
Vehicle value	R 320,000
Total km driven	20,000 km
Business km	12,000 km
Business percentage	60%
Method	Best When
Actual Cost	Your actual costs exceed deemed costs
Deemed Cost	You don't want to track every expense

ProcessX can calculate both methods so you can compare.

ProcessX Automation

ProcessX automatically:

Tracks your business kilometres

Calculates business use percentage

Applies current SARS rates

Generates the deduction calculation

Exports for your tax return

Limits and Caps

Vehicle Value Cap

SARS caps the vehicle value used for calculations at R665,000. If your car cost more, use R665,000.

Travel Allowance Limitation

Your deduction cannot exceed your travel allowance received. If your allowance is R5,000/month (R60,000/year), maximum deduction is R60,000.

Taxable Portion

Taxable Travel Allowance = Allowance Received - Deduction

This taxable portion adds to your income.

Year-End Process

At tax time:

Export your vehicle logbook

Review business kilometres

Check business percentage

Calculate deduction (ProcessX does this)

Enter on ITR12 (code 3702)

File your return on SARS eFiling.

Common Mistakes

Not keeping logbook: No logbook = no deduction

Claiming too much: Can't exceed allowance received

Wrong vehicle value: Use original purchase price

Forgetting all costs: Include everything for actual method

Incomplete records: Missing months weaken your claim

External Resources

SARS Travel Allowance Guide - Official deduction guidance
SARS Fixed Cost Tables - Current rates
SARS eFiling - File your tax return online
ITR12 Guide - Personal income tax returns

Last updated: March 2025