Sometimes employers pay cash allowances to an employee for travel between home and work.
A cash allowance paid to an employee for travel between home and work is tax-free if:
- the amount paid reimburses an employee's additional transport costs, and
- has no adequate public transport system that serves the workplace.
This applies to us we have no public transport available.. and its 75km away
Re-embursement can be
- mileage rate
- Actual Costs Eg cost of petrol + 4 tires per year?
Official IRD Mileage rate can be
- First 55km/day @ $0.76/km
- Subsequent Kms @ $0.26/km
So a 150km round trip , this would calculate as
- 55 x 0.76 + 95 x 0.26
- $66/per day (first $5/day is taxable)
- $17000 pa
I currently get given $2500,
I car pool with 2 others, who will also get $2500 as an allowance, so only $7500.. far cry from IRD $17000
even if the car was full, only $10000 would be accumulated
I would prefer these options be considered by my company
- driver only of carpool given full IRD rate of $66/day to bring in upto 4-5 people per day depending on car size
- make a company car/van available for transport of staff, which maybe cheaper than carpool cost.
There is some argument that Company can't give us company pool car to use as to take 4 employees home as FBT applies.. I disagree.. does anyone have a definitive answer?
Surely if IRD allows $66/per day to be paid tax free, then they could allow a work car to be used?