Per diem and personal use of company vehicles

AnnGee

[font size="1" color="#FF0000"]LAST EDITED ON 12-31-04 AT 05:56AM (CST)[/font][br][br]I am confused on employees who use company vehicles for personal use. We have 2 employees who take vans home because we don't have room to park them off the street. We allow the round trip miles to their homes, but anything over that mileage, we charge them the current rate per mile (2004 is $.375 per mile). Am i doing this correctly and is there an additional charge we can impose for those who drive 100+ miles over the autorized miles per week? Maybe a daily charge too? Our 2nd issue is per diem. We have tried reimbursing employees based on receipts up to the current daily rate for overnight trips. This did not work. We now issue them $30.00 per every night they are out of town. I am not sure if i need to put this into their gross pay so it is taxed. The IRS pubications have just confused me. Thank you anyone out there who can help with ways your company handles these issues.

marc

The per diem is not taxable.

As to imposing a limit on personal usage of the company vehicle, that is up to each company. Theoretically, at $.375 per mile, the company will offset all costs of ownership, including depreciation of the vehicle - so the company would not be out any dollars.

The bigger issue to me, is the additional risk taken by having a company vehicle more exposed to accidents while being used personally. Yes, the $.375 covers the cost of insurance, but would it cover the cost of defending a lawsuit and perhaps paying a judgement, and then getting higher insurance rates? I don't think the $.375 is meant to handle something like that.

JM in ATL

Like Marc said - you can charge what you want if they use the vehicle for personal use.

I would definitely not recommend that, but it's obviously something the company doesn't have a problem with. Maybe if you want to reduce the useage, you charge $.50 per mile over what is allowed plus a service charge of $25 per month. (Just throwing numbers out, here).

Per Diem is not taxable - just as reimbursements are not taxable. But I would still require employees to turn in all receipts so you can determine whether or not the $30 is actually being applied. You might be able to reduce that amount based off of use.

SMace

The allowable amount is now$.405, I believe.

marc

Correct Stephen, Effective January 1, 2005.

AnnGee

I found in the HRedge Inc under Travel & Entertainment Policy & Procedure Manual, an option to provide Travel Advance. they stated that if the employee did not provide receipts in a certain amount of time, the employer could take the advance from the pay. Would this be a taxable withdrawl? And would we be allowed to tack on a fee for having to take this route? thanks for all the help so far.

marc

I am not sure what you mean by taxable withdrawal, but if it is just repaying the initial advance, that is all it is - a repayment. By the way, any payroll deduction must be authorized by the EE with specific descriptions.

Tacking on a fee can probably be done if it is agreed to up front, though I have never seen this done; but why in the world would you want to do that? This seems Draconian to me.

By the way, we don't require receipts for the per diem stuff. We allow Breakfast, Lunch and Dinner advance plus $5 for tips. The total is $31.00 per day. We will pay additional when traveling to certain cities/regions, such as Washington DC where the per diems don't cover a normal day's meal costs. In that case, we require receipts - otherwise, if the EE wants to pack a lunch or starve themselves, they can keep the money.

You will find lots of things that need and require documentation, but I would not spend a lot of time looking for work in this area.

JM in ATL

The $.40 is what you can write off on taxes. The limit the IRS will allow you or the company to take. You can reimburse your ee's any $ you would like. You can also charge whatever you want for personal use milage. As long as it is applied consistently across the board.

Are you looking to deter personal use of the company vehicles?

Don D

You said the reason they take the vehicle home is because you 'don't have room to park them off the street'. It would be a lot less expensive with much less liability to pay a garage fee for the vehicles.





**When we do for others what they should do for themselves, we disempower them.**

pork1

ANNGEE: Security of company property is a very real situation. If either of these employees is a labor/wage nonexempt FLSA person you just might be giving them an additional job of security of the company vehicle. Which means you need legal advice as to whether you should be paying them hourly rates of pay for the distance and time to get the vehicle to a secure location. Charging them for personal use of the company vehicle would be wrong in the circumstance you have written.

I am exempt and I have a company vehicle for which I am charged for the personal use of the company vehicle. It appears on my W-2 as additional income, a plus up by the value of the car or vehicle per mile used. Mine is a buick centry and it is cheaper than the Chev Blazer driven by the General Manager. We could use our personal vehicles to drive back and forth to work from home, but because we both can be called out on any given night to take care of night time emergencies, we choose to take the vehicle home and be charged the personal use, as reported monthly by me to the Accountant.

We have several hourly employees, who take company vehicles home. One reason is security of the vehicle, but another more important reason is because their work is accomplished out of the vehicle and they report to work, when they get called out of their homes to go to an event to work, "the clock-in time". If they come into the primary work site, "the dispatch point" they are simply returning the vehicle to the company location from a secure location. They punch in at the time they report into the dispatch point. There are 5 plant mechanics on call every night and 5 mechanic trucks, none are charged personal miles for use of the company vehicle to secure our vehicle and to be able to be called out at any time.

They must report any personal miles like grocery shopping after they have gotten home and returned to the grocery store. Therefore , none of them ever uses the vehicle for personal use at least we have not caught them. If they stop on the way home to pick up bread and milk we do not count that as personal use.

It is very confusing, but the answer is in the IRS log book maintained by every driver, which accounts for the miles travelled, time in the vehicle, and purpose of the trip. Mine has a lot of personal use to and from work daily, unless I get called out to an 18 wheeler accident or murder of an employee, or a fire in the "train locomotive", all of which have happened several times, vehicle accidents being the most.

I hope this helps!!!

PORK