You can claim vehicle costs against business income in South Africa, but only for the business-use portion, and only with a logbook. Without a logbook SARS will disallow the claim regardless of how genuine the business travel was. There are three routes: claim actual costs apportioned by business kilometres, receive a reimbursement of up to R4.95 per business kilometre free of PAYE, or use a company car and be taxed on the fringe benefit.
Vehicle claims are the most commonly disallowed deduction in SARS verifications. Not because the expense is not real — because the record is not there.
TL;DR
No logbook, no claim. This is close to absolute.
Reimbursive rate 2026/27: no PAYE on up to R4.95 per business kilometre.
Travel allowance: 80% included in remuneration for PAYE, dropping to 20% where business use is at least 80%.
Company car fringe benefit: 3.5% per month of cash cost including VAT, or 3.25% if under a maintenance plan when acquired.
Fuel carries no VAT — petrol and diesel are zero-rated.
Input VAT on a motor car is denied, though repairs and servicing remain claimable.
The logbook is the whole thing
Start here, because nothing else matters without it.
SARS requires a logbook to support any vehicle claim. It must record:
Opening odometer reading at the start of the tax year
Closing odometer reading at the end of the tax year
For every business trip: the date, the kilometres travelled, the destination, and the reason for the trip
Private trips do not need individual entries. Total kilometres less business kilometres gives private kilometres.
What does not work:
Reconstructing it in March from your diary
A percentage estimate with no underlying record
"I use it about 70% for work"
A logbook with no odometer readings
What does work: a logbook app that records trips automatically, or a notebook in the cubbyhole filled in as you go. SARS publishes a logbook template each year, and most accounting and tax apps include one.
One practical point: start the year with a photograph of the odometer, dated. It costs nothing and settles the opening reading question permanently.
Route 1: claiming actual costs (sole proprietors and companies)
Where the vehicle is used in the business, you claim the business-use portion of the actual running costs.
Claimable, apportioned by business percentage:
Fuel
Insurance
Licensing
Repairs, servicing and tyres
Finance charges on the vehicle loan (the interest portion, not the capital)
Wear and tear on the vehicle
Worked example. A sole proprietor drives 32,000 km in the year, of which 19,200 km are business — 60%.
| Cost | Total | Business portion at 60% |
|---|---|---|
| Fuel | R48,000 | R28,800 |
| Insurance | R14,400 | R8,640 |
| Licence and services | R11,000 | R6,600 |
| Finance interest | R23,000 | R13,800 |
| Wear and tear (R320,000 over 5 years) | R64,000 | R38,400 |
| Total | R160,400 | R96,240 |
At a marginal rate of 31%, that deduction is worth roughly R29,834 in tax.
Wear and tear on a motor vehicle is typically claimed over five years on the straight-line basis, per SARS Binding General Ruling 7.
Route 2: reimbursive travel (employees and directors)
Where an employer reimburses an employee for actual business kilometres travelled in the employee's own vehicle, no PAYE is payable on amounts up to R4.95 per kilometre for 2026/27.
A logbook is required.
Worked example. An employee drives 1,100 business kilometres in a month.
1,100 × R4.95 = R5,445 reimbursed, free of PAYE.
Why this is often the cleanest arrangement: no fringe benefit, no allowance to reconcile at assessment, no company asset on the balance sheet. The employee is simply reimbursed for a cost incurred.
Where it gets taxed: amounts above R4.95 per kilometre, or reimbursements paid without a logbook, are subject to PAYE.
Route 3: a fixed travel allowance
A monthly allowance paid regardless of actual travel.
How it is taxed: 80% of the allowance is included in remuneration for PAYE purposes, reducing to 20% where at least 80% of the vehicle's use is for business.
At assessment, the employee claims the actual business-use deduction against the allowance, based on the logbook — so a fixed allowance is effectively an advance that is trued up at year-end.
The risk: an employee who receives a generous allowance and does little business travel ends up with an assessment they were not expecting, because the deduction they can substantiate is much smaller than the allowance received.
Route 4: a company car
Where the company owns the vehicle and the employee or director uses it privately, a fringe benefit arises.
Taxable value: 3.5% per month of the cash cost of the vehicle including VAT, reducing to 3.25% per month where the vehicle was subject to a maintenance plan at the time the employer acquired it.
80% of that fringe benefit is included in remuneration for PAYE, reducing to 20% where at least 80% of use is for business.
At assessment, the fringe benefit is reduced by the business-use ratio proven by logbook. The employee can also claim the full cost of licence, insurance, maintenance and fuel relating to private travel where they bore those costs entirely themselves.
Worked example. A company car costing R560,000 including VAT, no maintenance plan.
Monthly fringe benefit: R560,000 × 3.5% = R19,600 Included in remuneration for PAYE at 80%: R15,680 a month
That is a substantial addition to taxable remuneration — which is why company cars are often less attractive than they appear.
The VAT position is different
Two things that trip people up, because income tax and VAT answer different questions.
Input VAT on the acquisition of a motor car is denied. A motor car is broadly a vehicle designed mainly for carrying passengers, with three or more wheels and seating fewer than ten. Sedans, SUVs and most double-cab bakkies fall inside it; single-cab bakkies, panel vans and trucks generally do not.
Running costs remain claimable. Repairs, servicing, tyres and short-term insurance carry VAT and are claimable even on a denied vehicle.
Fuel carries no VAT at all. Petrol and diesel are zero-rated, so there is nothing to claim.
Full detail in the expenses you can never claim VAT on.
Which route is best?
| Situation | Usually best |
|---|---|
| Sole proprietor, own vehicle | Actual costs, apportioned |
| Employee with occasional business travel | Reimbursive at R4.95/km |
| Employee with heavy, regular business travel | Reimbursive, or a company car if business use exceeds 80% |
| Director wanting the company to carry the cost | Company car — but model the fringe benefit first |
| Business needing a bakkie or van | Company-owned, and check the VAT position before buying |
The one that is almost never optimal is a large fixed travel allowance with light actual business travel. It produces PAYE through the year and an assessment shortfall at the end.
Frequently asked questions
Can I claim my car as a business expense in South Africa? Yes, for the business-use portion, but only with a logbook recording opening and closing odometer readings and every business trip with its date, kilometres, destination and purpose. Without a logbook the claim will be disallowed.
What is the SARS rate per kilometre for 2026/27? Where an employer reimburses an employee based on actual business kilometres travelled, no PAYE is payable on amounts up to R4.95 per kilometre. A logbook is required.
Do I really need a logbook? Yes. Vehicle claims without a logbook are among the most commonly disallowed deductions in SARS verifications. A reconstructed estimate or a percentage with no underlying record will not survive.
How is a company car taxed in South Africa? As a fringe benefit valued at 3.5% per month of the cash cost including VAT, or 3.25% where the vehicle was under a maintenance plan when the employer acquired it. 80% of that benefit is included in remuneration for PAYE, dropping to 20% where at least 80% of use is for business.
Can I claim VAT on a company car? No. Input tax on the acquisition of a motor car as defined is denied. Repairs, servicing, tyres and short-term insurance remain claimable, and fuel carries no VAT at all because petrol and diesel are zero-rated.
How is a travel allowance taxed? 80% of the allowance is included in remuneration for PAYE purposes, reducing to 20% where at least 80% of the vehicle's use is for business. At assessment the employee claims the actual business-use deduction based on the logbook.
What can I claim on a vehicle besides fuel? Insurance, licensing, repairs, servicing, tyres, the interest portion of finance charges, and wear and tear — all apportioned by business use percentage.
Is a bakkie treated differently from a car? For VAT, generally yes — single-cab bakkies and panel vans usually fall outside the motor car definition, so input tax is claimable, while double cabs are commonly treated as motor cars and denied. For income tax, the business-use apportionment and logbook requirement apply to any vehicle.
The record that makes the claim survive
The deduction is usually straightforward. The evidence is what fails — and it fails eleven months after the travel happened, when nobody can reconstruct it.
Smartbook sets up vehicle claims properly at the start of the year, applies a documented apportionment, and maintains the fixed asset register that drives the wear and tear.
Last reviewed: 26 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Figures are for the 2026/27 tax year. Worked examples are illustrative. Vehicle classification for VAT is fact-specific — confirm before purchase. General guidance, not advice on your circumstances.
Primary sources: SARS — Budget 2026 Frequently Asked Questions · SARS — Budget Tax Guide 2026 · SARS — Interpretation Note 82: Input tax on motor cars · SARS — Travel logbook