Do you pay a car allowance to employees?

From 1 July 2015, under the cents per kilometre method, individual taxpayers can only claim a deduction of $0.66 per kilometre of work-related travel (up to 5,000km) in their individual tax returns.

Where employers reimburse their employees for their work-related travel, any reimbursement over $0.66 will be subject to tax in the employee’s tax return. Consequently, employers should withhold tax on any allowance paid to employees in excess of the $0.66 per kilometre.

DISCLAIMER: The information in this article is general in nature and is not a substitute for professional advice.  Accordingly, neither TJN Accountants nor any member or employee of TJN Accountants accepts any responsibility for any loss, however caused, as a result of reliance on this general information.  We recommend that our formal advice be sought before acting in any of the areas.  The article is issued as a helpful guide to clients and for their private information.  Therefore it should be regarded as confidential and not be made available to any person without our consent,