vehicle allowance

Nick Ogden

Looking for options for paying for vehicle allowances for managers, and others. We currently pay a fixed amount per month to managers; they then use the money to pay for their vehicles (lease, gas, all costs). We want to try and reduce the "hit" to their income (the car allowance is considered as part of their regular income. We don't provide the vehicle directly because we don't want the exposure liability. The amount we give for the car allowance varies from $500-$1,000/month. Any suggestions?

Don D

Either the employee 'takes the hit' or the company 'takes the hit' with these sorts of arrangements. The employee still comes out way ahead after taxes if you give that much allowance. We just reimburse mileage. Today the memo goes out reducing the mileage from 36.5 to 36, effective January 1, in accordance with federal standards. The only ones here who have company cars are traveling salespeople. The only ones who have a car allowance are the three owners. All the rest of us peons either make monthly notes or drive junkers.

NaeNae55

We reimburse mileage, but we have a limit. Kind of strange, I know, but here is how it goes.

Employees are reimbursed current IRS rate for mileage logs turned in for reimbursement. This is done through accounts payable, not payroll.

Exception: We have one employee who uses 'excessive' mileage. Since that employee always uses at least twice the amount budgeted for her department, she is limited to reimbursement of the budgeted amount (which equals a fixed monthly amount per month). Since she turns in a log, her reimbursement, like the others, is handled through accounts payable and never hits payroll. She keeps copies of all the logs and at year end uses her un-reimbursed miles as a deduction on her income taxes.

Good luck!

cebudragonlady

Just my six cents worth: scrap the monthly auto allowance. There will always be someone trying to get more. We had a salesperson get a $ 600 monthly auto allowance, and then charged personal gas usage on the company credit card, and tried to claim mileage on top of that. That person got fired last Friday.

Chari