HR Pulse

How to deal with e-tolls and the Gautrain on your payroll

Many, many employers are scratching their heads, wondering how to treat the e-tolls and Gautrain expenditure on their payroll. Ian Hurst from Paymaster sheds some light on the subject.

Scenario 1 - The employer owns the e-tag or Gautrain card and pays the bill

In the case, the employee should submit a monthly report of how much he used the card for business use and private use, otherwise the entire amount will be taxed as a fringe benefit:

• If the card was used for private purposes, ensure that the value of the private usage is taxed as a fringe benefit.
• If you company is registered for Vat, you'll get the Vat back as if it's a normal company expense.

Scenario 2 - The employee owns the e-tag or Gautrain Card and pays the bill

In this case, the employee should submit a monthly claim detailing all business-related e-tolls or Gautrain expenses that you need to reimburse.

• If you process the reimbursed amount your payroll, treat it as reimbursive travel and reflect it on the employee's payslip and IRP5 as such.
• You can't claim Vat if your employee isn't a Vat vendor. If the employee is a Vat vendor, you can claim Vat as per your normal Vat process.

If you pay the bill on behalf of your employee, this is seen as 'payment of an employee debt' and you need to tax it accordingly.