The Intelligent

HR/Payroll Software

Growth

nuQ grows as your business grows.

Runs on any computer

The same version of nuQ can run on a stand alone pc, intranet or on the internet.

Employee self-service

Any employee can use your intranet or the internet to change personal data, book leave requirements, securely view his/her payslip, view payment history and generally do what you want your employees to do. Easily set security profiles, limit what an employee can do.
Home > Frequently Asked Questions > General >

Relocation costs?

You are entitled to pay your employee’s relocation costs free of tax, as follows –
• The cost of transporting the employee, members of his household and personal goods and possessions from his previous place of residence to his new place of residence.
• Such costs as the Commissioner may allow which have been incurred by the employee in the sale of his previous residence and settling into permanent residential accommodation at his new place of residence.
• The cost of hiring temporary residential accommodation in a hotel or elsewhere for the employee and members of his household for a maximum of 183 days after the transfer took place or after the date of his appointment.

It is immaterial whether the employer pays for these expenses directly or reimburses the employee for expenses incurred.

The SARS Employer’s Guide says that to simplify administration, it is acceptable and treated as tax free if an amount equal to one month’s basic salary is paid to the employee to cover settling in costs (excluding those related to transport, temporary accommodation and the purchase and/or sale of a residence). In other words, all the costs set out above in the 3 bullets may be paid by the employer, excluding settling in costs, and the employee in addition may be paid up to one month’s basic salary free of tax to cover settling in costs.  Of course, such payment must be made over and above the normal salary – you can’t just pay one month’s salary free of tax, and not also pay that month’s normal salary which is subject to tax.

I have given you rather a long winded answer, as I think you need to understand what SARS allows free of tax and why they allow it.

Dealing now with the specific question you have asked, you will see from the third bullet above that the employer can also pay for up to 183 days of temporary accommodation, while the employee is finding permanent accommodation.  That is 6 months accommodation, not just 4 months as you have stated.  However, this cannot be paid as an allowance to the employee – it must be the actual cost of temporary accommodation.