AA Rate per KM 2025: Calculator & Guide
By MoneyToday Team • Updated Dec 2025 • 6 min read
If you use your personal vehicle for business purposes, you are entitled to claim a travel allowance. The AA (Automobile Association of South Africa) publishes estimated running costs that serve as a benchmark for these claims.
For 2025, considering fuel price fluctuations and inflation, the rates generally range between R4.31 and R6.01 per kilometer, depending on your vehicle's value, engine capacity, and fuel type.
Note: These rates have increased by approximately 7.2% from 2024, mainly due to rising fuel prices, higher insurance premiums, and increased maintenance costs.
2025 AA Rates at a Glance
| Engine Size | Fixed Costs | Running Costs | Total Rate |
|---|---|---|---|
| Up to 1600cc e.g. VW Polo 1.4, Toyota Starlet | R2.75/km | R1.56/km | R4.31/km |
| 1601 – 2500cc e.g. Toyota Corolla 2.0, VW Jetta | R3.45/km | R1.76/km | R5.21/km |
| Above 2500cc e.g. BMW X5, Mercedes C350 | R4.06/km | R1.95/km | R6.01/km |
* Based on AA assumptions: Petrol R25.80/litre, Diesel R24.30/litre, 20,000 km/year average
Estimate Your Rate
Average is approx. 32,000 km/year
*Estimate only. Factors in value, engine size, and fuel type.
Components of the Rate
The rate per kilometer is not just about petrol. It is a composite figure derived from two main categories:
1. Fixed Costs
- Vehicle Depreciation
- Comprehensive Insurance
- Licensing & Admin Fees
These costs are incurred whether the car moves or not.
2. Running Costs
- Fuel (Petrol/Diesel)
- Service & Repair
- Tyres
These costs are directly related to distance driven.
Tax Implications (SARS)
It is important to note that the AA Rates are different from the SARS Prescribed Rate. For the 2025/2026 tax year (effective 1 March 2025), SARS has set the rate at R4.76 per km (down from R4.84 in the previous year).
Employers may reimburse employees at the AA rate, but if this rate exceeds the SARS prescribed rate, the difference may be subject to PAYE tax unless accurate logbooks prove the actual business expense.
AA Rate vs SARS Rate Comparison
If your employer reimburses at R5.21/km and you don't keep a logbook, the R0.45 difference (R5.21 - R4.76) is taxable.
Subsistence Allowances (2025)
If your employer provides a subsistence allowance for overnight trips or day travel, SARS has also updated these rates effective 1 March 2025:
Understanding Depreciation
Depreciation is one of the largest components of your vehicle's cost per kilometre, especially for newer cars.
How Fast Do Cars Depreciate?
The AA calculates depreciation based on average resale values after 5 years or 100,000 km.
How to reduce your cost per km
While you can't control the petrol price, you can manage other factors:
- Drive smoother: Aggressive acceleration increases fuel consumption by up to 30%.
- Check tyre pressure: Under-inflated tyres increase rolling resistance and fuel use.
- Service regularly: A well-maintained engine is more efficient.
Frequently Asked Questions
Can I claim for travel between home and work?
No. SARS considers travel between your home and your place of work as private travel. You can only claim for business trips (e.g., visiting a client, going to a site inspection) that are not your usual commute.
Does the AA rate cover toll fees and parking?
Generally, no. The AA rate per kilometer covers the cost of running the vehicle (fuel, wear and tear). Toll fees and parking expenses should usually be claimed as separate, actual expenses with receipts.
Why is my employer's rate lower than the AA rate?
Employers are not legally required to use the AA rates. Many use the SARS simplified rate (currently R4.76/km for 2025/26) to avoid additional tax administrative burdens. If your employer pays more than the SARS rate, the difference is often taxable.
How do I prove my business mileage?
You must keep a compliant logbook. SARS requires specific details: Date, Opening Odometer, Closing Odometer, Total KM, and Details of Business Travel (Where and Why). Without a logbook, you cannot claim a tax deduction against a travel allowance.
Why did the SARS rate decrease from R4.84 to R4.76?
SARS adjusts the rate annually based on various factors including fuel prices and economic conditions. The decrease reflects slightly lower fuel prices compared to the previous period. However, the AA rates (which reflect actual costs) increased by 7.2%, so there's a growing gap between the two.
Can I use the AA rate for my freelance business?
Yes, freelancers and self-employed individuals can use AA rates to calculate vehicle expenses for tax purposes. However, you must keep detailed records (logbook, fuel receipts, service invoices) to substantiate your claims to SARS.
Is diesel or petrol cheaper per kilometre?
Diesel vehicles typically have slightly lower running costs per kilometre (the AA applies a ~2% reduction factor). Diesel engines are more fuel-efficient, though the vehicles often cost more upfront. For high-mileage drivers (40,000+ km/year), diesel usually works out cheaper overall.
What Your Logbook Must Include
SARS requires a compliant logbook to claim travel allowance deductions. Here's what you need to record for each trip:
Record opening and closing odometer readings at the start of each tax year, and log every business trip.