How do I change the taxable percentage on an employee’s Travel Allowance component?
This feature is available on all PaySpace editions.
Should an employee's Travel Allowance component be taxed at 20%, add the Travel Business Usage note component to either their Edit Payslip or Recurring Payroll Components screens and specify at which percentage it must be taxed.
Navigate > Configuration > Payroll > Payroll Config > Payroll Components
Navigate > Employee > Payroll Processing > Recurring Payroll Components > Notes
From 1 March 2024, the 100% taxable options on the following components will output an error message 'Travel tax cannot be 100% for this tax year' if selected:
Company Car component - Use of motor vehicle acquired by employer NOT via operating lease. (tax code: 3802)
Travel Business Usage Component (tax code: 0000)
According to the definition of remuneration as defined in paragraph 1 of the Fourth Schedule:
- Only 80% of a travel allowance (which includes a fuel card when used with a private vehicle) should be included in remuneration unless the employer is satisfied that at least 80 percent of the use of the private motor vehicle for the year of assessment will be for business purposes, then only 20 per cent of the amount of such allowance or advance must be included, and
- Only 80% of the right of use of a motor vehicle should be included in remuneration unless the employer is satisfied that at least 80 per cent of the use of the motor vehicle for the year of assessment will be for business purposes, then only 20 per cent of the amount of such allowance or advance must be included.