An employee pays for fuel, parking or supplies out of their own pocket and asks the business to pay them back. Simple — until tax time, when it turns out the reimbursements were taxed as salary, the VAT was never claimed, and there isn't a slip in sight. Here's how to run claims properly.
Rule 1: a reimbursement is not salary
A genuine business expense reimbursement is not remuneration — no PAYE, no UIF, no SDL. Running it through payroll as extra salary overtaxes your employee and overstates your payroll costs. It should be booked as the actual expense (fuel, stationery, travel) with the credit going to the bank account you repaid from — or to a liability account until you pay.
What employees can legitimately claim
Business costs they paid personally, with a slip: fuel and parking for work trips, tolls, stationery and supplies, courier costs, work airtime and data, small tools, accommodation when travelling for work. The test is simple: would the business have paid this directly if it could have?
What to handle differently
- Per-kilometre travel ("I drove 120 km for work in my own car") is not a slip claim — pay it as a travel reimbursement at or below the SARS prescribed rate per km, in which case it's non-taxable and belongs on the payslip as its own non-taxable line, outside gross pay. Above the rate it becomes taxable.
- Fixed allowances (a monthly car or phone allowance) are remuneration — tax them through payroll properly.
- Entertainment (client meals, gifts): the business can claim the cost, but input VAT on entertainment is generally not claimable — capture the claim with R0 VAT.
- Personal spend: only the business portion, clearly described.
The VAT rules
If you're VAT registered, slips from VAT vendors carry claimable input VAT — but only with the slip as proof (and for purchases over R50, a slip that qualifies as a tax invoice). Two habits keep you safe:
1. No slip, no claim. Ever. 2. Unsure about the VAT? Claim R0 VAT. You keep the income-tax deduction and lose nothing arguable.
What SARS expects as proof
A description that shows business purpose — "Fuel — delivery to client, Midrand" beats "Fuel" — plus the receipt itself, kept for five years. In an audit, claims without receipts get disallowed and the VAT clawed back with penalties.
The clean workflow
1. Employee submits the claim with a photo of the slip, the date, the amount and the VAT shown. 2. Someone approves it and decides two things: which expense account it belongs to, and whether it's repaid now (credit bank) or owed (credit a staff-reimbursements liability). 3. The books post the expense (and input VAT where claimable), and the receipt is filed with the transaction.
360books gives every employee a private portal link — no login, no extra seat — to submit claims with a photo of the slip. You approve from Payroll → Leave & claims, pick the expense account, and the entry posts itself: expense plus input VAT on one side, bank or liability on the other. Every approved receipt is stored and bundled automatically into the SARS audit pack, and per-km travel has its own non-taxable payslip field so it's never taxed by accident.