Although the 2025 Budget Speech has been postponed to 12 March 2025, when updates such as the personal income tax tables will be announced, certain payroll-related changes based on recently published legislation will take effect from 1 March 2025.

Legislative Amendments

The Taxation Laws Amendment Act, 2024 and the Tax Administration Laws Amendment Act, 2024 were published on 24 December 2024 in Government Gazette Nos. 51826 and 51827. These amendments introduce the following payroll-related changes to the Income Tax Act:

• Addition of paragraph 2(4)(g) to the Fourth Schedule: Permits section 11(nA) tax deductions for refunds made within the same tax year.
• Update to the definition of ‘Remuneration Proxy’ in section 1: Aligns the definition with that of an associated institution in the Seventh Schedule.
• Addition of section 5(3) to the Employment Tax Incentive Act: Introduces further measures to curb the abuse of Employment Tax Incentive (ETI).

For a detailed explanation of these amendments, please refer to the attached document.

SARS Income Tax Notices

SARS has also published three new Income Tax Notices:

• Fixing of the rate per kilometre for motor vehicles – Section 8(1)(b)(ii) and (iii).
• Determination of the daily amount for meals and incidental costs for overnight travel – Section 8(1)(c)(ii).
• Determination of the daily amount for meals and incidental costs for daily travel – Section 8(1)(a)(ii).

Although these notices have not yet been gazetted, employers may rely on these values for the 2025/26 tax year.

Key changes effective 1 March 2025:

• The prescribed rate per kilometre for business travel reimbursement will decrease from R4.84 to R4.76 per km.
• The deemed subsistence allowance rates for travel within South Africa will increase:
  • From R548 to R570 per day (or part of a day) for meals and incidentals.
  • From R169 to R176 per day (or part of a day) for incidentals only.
• The deemed rate for meals and incidentals on a business day trip will increase from R169 to R176 per day.
• The travel allowance cost scale table will be updated as follows:

Further amendments may be introduced following the Budget Speech on 12 March 2025, and we will provide an update once these changes are announced.