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A Fin24 user, who earns US dollars for work done in Africa, wants to know about the South African tax implications. He writes:
If I am an expert and work in Africa for USD, do I get a rebate on my tax?
According to some information I received, you are cleared for tax on $199 per day if you are on rotation for more than eight weeks.
Graham Patrick, a Fisa member and fiduciary specialist at Nedbank Private Wealth, responds:
Due to your reference to being “cleared for tax US$199 per day", I suspect you have been receiving advice about a subsistence allowance.
A subsistence allowance is an allowance given to an employee for expenses incurred (or to be incurred) in respect of personal subsistence and related costs (such as drinks).
Where the allowance is in respect of activities outside of South Africa (such as your circumstances where you are working in Africa), the South African Revenue Service (Sars) publishes a table which determines the deemed daily allowance, which varies from country to country.
For example, the allowance for Kenya is currently $116 whereas the allowance for Nigeria is currently $121.
However, it should be mentioned that the nature of this allowance is frequently misunderstood.
Sars, in its Interpretation Note 14, details that the subsistence allowance is meant for exceptional circumstances. It cannot form part of an employee’s normal pay.
Whilst you need to spend at least one night away from your usual place of residence, the period cannot exceed six weeks spent outside South Africa.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
If I am an expert and work in Africa for USD, do I get a rebate on my tax?
According to some information I received, you are cleared for tax on $199 per day if you are on rotation for more than eight weeks.
Graham Patrick, a Fisa member and fiduciary specialist at Nedbank Private Wealth, responds:
Due to your reference to being “cleared for tax US$199 per day", I suspect you have been receiving advice about a subsistence allowance.
A subsistence allowance is an allowance given to an employee for expenses incurred (or to be incurred) in respect of personal subsistence and related costs (such as drinks).
Where the allowance is in respect of activities outside of South Africa (such as your circumstances where you are working in Africa), the South African Revenue Service (Sars) publishes a table which determines the deemed daily allowance, which varies from country to country.
For example, the allowance for Kenya is currently $116 whereas the allowance for Nigeria is currently $121.
However, it should be mentioned that the nature of this allowance is frequently misunderstood.
Sars, in its Interpretation Note 14, details that the subsistence allowance is meant for exceptional circumstances. It cannot form part of an employee’s normal pay.
Whilst you need to spend at least one night away from your usual place of residence, the period cannot exceed six weeks spent outside South Africa.
- Fin24
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.
