Vehicle Allowance

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Byrned

455 posts

Ultimate Geek

#55965 11-Jan-2010 16:37

Hey Guys

Starting a new job next week which comes with a vehicle allowance, but I can't find any info on how this is normally taxed.

I've managed to track down some info that suggests that it would be considered a non-taxable allowance, but I also remember a friend saying that when they had an allowance it was taxed at a stupid rate.

Payrol for the company is done through a third party company and it's proving difficult to get a traight answer. Just wondering if anyone has had any experience with this sort of thing.

Cheers

freitasm

BDFL - Memuneh
79308 posts

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Geekzone

Lifetime subscriber

#289011 11-Jan-2010 16:39

I left my previous job three years ago (doing Geekzone only since) but I had a car allowance (and petrol and parking) for years... It was taxed at the standard rates.

welliegeek

135 posts

Master Geek

#289022 11-Jan-2010 17:03

Same as Mauricio.... :(

I'm paid out of Oz but NZ tax rules still apply.

phillw

60 posts

Master Geek

#289044 11-Jan-2010 18:14

I am lucky enough to just put in a claim expense form for my travel, parking etc - I am reimbursed the full amount just like the money was taken from petty cash, so im not out of pocket at all and there is no tax on it :)

phillw

60 posts

Master Geek

#289045 11-Jan-2010 18:15

However - if you do a lot of travel then it isn't convenient to log all travel time between jobs so usually a vehicle allowance is a better way to go - sometimes you win and sometimes you don't.

exportgoldman

1202 posts

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#289064 11-Jan-2010 19:06

phillw: I am lucky enough to just put in a claim expense form for my travel, parking etc - I am reimbursed the full amount just like the money was taken from petty cash, so im not out of pocket at all and there is no tax on it :)

Actually there is still tax on it, you are paying around 35%-45%, you just don't notice it. :) Let me explain, if you had a company registered for your car then you don't have to have (20%-33%) of your money taxed as PAYE, then you can claim back the GST (12.5%) as it's a expense your company incurrs.

So in effect you could buy twice as much if you run it all through a company. Not that I'm saying you do that, it's a lot of paperwork, but for some people it's worth it.

Tyler - Parnell Geek - iPhone 3G - Lenovo X301 - Kaseya - Great Western Steak House, these are some of my favourite things.

Byrned

455 posts

Ultimate Geek

#289081 11-Jan-2010 20:10

Thanks guys - appreciate all the info. You'd think it would be easy to find this sort of thing out...