What is Code 3702 on a South African Payslip?
Reimbursive travel allowance explained — how it differs from a travel allowance, when it is tax-free, the SARS prescribed rate, and why a logbook is non-negotiable.
3702Code 3702 is the taxable reimbursive travel allowance — used when your employer's per-kilometre rate exceeds the SARS prescribed rate of R4.95/km (2026/2027), or when you also receive a code 3701 fixed travel allowance. If neither applies, the reimbursement is fully tax-free and reported under code 3703 instead. A valid logbook is required either way.
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What Code 3702 Means
Code 3702 is a reimbursive travel allowance — an amount your employer pays to compensate you for the cost of using your own vehicle for business-related travel, based on the actual business kilometres you travel multiplied by a rate per kilometre, rather than a fixed monthly sum. Unlike a standard travel allowance (code 3701), code 3702 tracks real distance driven.
Code 3702 specifically applies in two situations: when your employer's rate per kilometre exceeds the SARS prescribed rate, or when you also receive a code 3701 fixed travel allowance from the same employer. In either case, at least part of the reimbursement is taxable, and it is reported under code 3702 on your IRP5 rather than the fully tax-free code 3703.
The fully tax-free version of this reimbursement — at or below the prescribed rate, with no other travel allowance running — is reported under a different code, 3703. Checking which code appears on your own IRP5 tells you immediately whether SARS treated your reimbursement as taxable or exempt.
Code 3702 vs Code 3703 — Key Differences
Taxable Reimbursement
Used when your employer's rate exceeds the SARS prescribed rate, or when you also receive a code 3701 travel allowance. At least part of the amount is taxable. Requires a logbook.
Tax-Free Reimbursement
Used when your rate is at or below the SARS prescribed rate (R4.95/km) and you receive no other travel allowance. The entire amount is exempt from tax. Requires a logbook.
The SARS Prescribed Rate and When Code 3703 Applies Instead
For a reimbursement to be reported under the fully tax-free code 3703, three conditions must all be met:
- The reimbursement rate must be at or below the SARS prescribed rate — R4.95 per kilometre for the 2026/2027 tax year (1 March 2026 to 28 February 2027)
- The employee must not also receive a code 3701 travel allowance from the same employer
- The employee must keep a valid logbook recording business kilometres
If any one of these conditions is not met, the reimbursement is reported under the taxable code 3702 instead — with any amount above the prescribed rate broken out separately under code 3722. SARS publishes the prescribed rate at the start of each tax year — verify the current rate at sars.gov.za before relying on any specific figure.
How It Affects Your Take-Home Pay
When your employer reimburses you at exactly the SARS prescribed rate, with no code 3701 allowance running alongside:
| Item | Amount |
|---|---|
| Business km driven in the month | 800 km |
| Employer reimbursement rate | R4.95/km |
| Gross reimbursement amount | R3,960 |
| SARS prescribed rate (2026/2027) | R4.95/km |
| Taxable portion (rate does not exceed prescribed rate) | R0 |
| IRP5 code (rate ≤ prescribed, no 3701) | 3703 |
| PAYE deducted | R0 — fully tax-free |
Now compare this to a code 3701 travel allowance of R3,960 per month:
| Scenario | Gross Amount | Taxable Portion | PAYE at 26% | Net Received |
|---|---|---|---|---|
| Code 3703 at prescribed rate | R3,960 | R0 | R0 | R3,960 |
| Code 3701 (80% included) | R3,960 | R3,168 | R824 | R3,136 |
If you receive both a code 3701 travel allowance and a per-km reimbursement from the same employer, the reimbursement is reported under the taxable code 3702 — not the tax-free code 3703 — regardless of whether your rate is at or below the SARS prescribed rate. The logic: you are already being compensated for travel costs through the 3701 allowance, so SARS treats the reimbursement as a further benefit subject to assessment. If your employer switches you from 3701 to a pure reimbursive arrangement, confirm in writing that the 3701 is stopped so future reimbursements can qualify for code 3703 instead.
Frequently Asked Questions
What does code 3702 mean on my payslip?
Code 3702 is the taxable reimbursive travel allowance — used when your employer's per-kilometre rate exceeds the SARS prescribed rate, or when you also receive a code 3701 fixed travel allowance. If your reimbursement is at or below the prescribed rate (R4.95/km for 2026/2027) and you have no other travel allowance, it is instead reported tax-free under code 3703. A logbook is required either way to substantiate the kilometres claimed.
Is code 3702 taxable?
Yes — code 3702 specifically denotes reimbursive travel that does not qualify for full tax exemption, either because your employer's rate exceeds the SARS prescribed rate or because you also receive a code 3701 travel allowance. If neither applies — rate at or below the prescribed rate, no other travel allowance, valid logbook — the reimbursement is fully tax-free and reported under code 3703 instead.
What is the SARS prescribed rate for 2026/2027?
The SARS prescribed rate for reimbursive travel for the 2026/2027 tax year is R4.95 per kilometre. This rate is published annually by SARS in a Government Gazette. Always verify the current rate at the start of the tax year — it changes, and using an outdated figure could result in unexpected tax liability.
Do I need a logbook for code 3702?
Yes — a logbook is non-negotiable. To claim the tax exemption, you must record: the date of each trip, the odometer reading at start and end, the destination, and the business purpose. SARS may request it during an audit. Without it, SARS can disallow the exemption and tax the full reimbursement. Digital logbook apps are acceptable as long as all required information is captured.
What is the difference between code 3702 and code 3703?
Code 3702 is used when reimbursive travel does not qualify for full tax exemption — either because your employer's rate exceeds the SARS prescribed rate, or because you also receive a code 3701 fixed travel allowance. Code 3703 is used for the fully tax-free scenario: reimbursement at or below the prescribed rate, with no other travel allowance running. Both require a logbook to substantiate the kilometres claimed.
What if my employer reimburses me above the prescribed rate?
The excess over R4.95/km is taxable income. If your employer pays R6.00/km for 1,000 business km, the portion up to the prescribed rate (R4,950) is reflected under code 3702, and the R1.05/km excess (R1,050) is reflected separately under code 3722. Both portions are included in your taxable income and assessed by SARS on your annual return.