How do I configure a Foreign or Local Subsistence Allowance component?
This feature is available on all PaySpace editions
In South Africa, a subsistence allowance is an amount paid to employees to cover the costs associated with meals, accommodation, and incidental expenses while they are away from their usual place of residence for work-related purposes. This allowance helps employees meet the additional costs they may incur during business travel, whether within the country (local subsistence allowance) or abroad (foreign subsistence allowance).
Local Subsistence Allowance: The local subsistence allowance applies to business travel within South Africa. It covers expenses such as meals, accommodation, transport, and incidental costs incurred by employees while traveling for work-related purposes within the country.
Foreign Subsistence Allowance: The foreign subsistence allowance is applicable for business travel outside of South Africa. It serves the same purpose as the local subsistence allowance but applies to international trips, covering costs associated with meals, accommodation, transport, and incidental expenses incurred during work-related travel abroad.
It's important to note that these allowances are subject to specific tax regulations and guidelines set by the South African Revenue Service (SARS). Employers must comply with these regulations when providing subsistence allowances to their employees and ensure proper reporting and taxation of these allowances. Employees should also be aware of the tax implications related to these allowances.
Step 1: Determine whether the Subsistence Allowance is Local or Foreign and if it will be taxed or not, then create the applicable component on company level.
Navigate > Configuration > Payroll > Payroll Config > Payroll Components
Navigate > Configuration > Payroll > Payroll Config > Payroll Components
Taxable codes 3704 and 3715 are applicable where the allowance paid for expenses in respect of meals and/or
incidental costs for local and foreign travel respectively, exceed the deemed
amounts.
Non-taxable codes 3714 are applicable where the allowance paid for expenses in respect of meals and/or incidental costs for local and foreign travel respectively, do not exceed the deemed amounts.
Step 2: Depending on the component created, add it onto the employee individually on their Edit Payslip or Recurring Payroll Components screens or collectively on the Bulk Actions screen.
The Edit Payslip screen
Navigate > Payroll Processing > Edit Payslip > Allowances
The Bulk Actions screen
The Bulk Actions screen
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