Is your car allowance taxable? It depends on whether it's an IRS-accountable plan or a non-accountable plan.
[Updated for 2023] What are the tax rules for mileage reimbursements? Many employers pay a cents-per-mile rate because it is simple to calculate. But it is important to know the IRS rules about...
A car allowance is a regular payment to employees to offset work expenses associated with a personal vehicle. It is the simplest, easiest way to pay for employee vehicle expenses. But there are a few...
Every business vehicle program needs a checkup from time to time. Whether you pay a car allowance or mileage rate or other form of reimbursement, it is vital to periodically assess the health of your...
Both employers and employees often ask us whether their car allowance or mileage reimbursement should be taxed. Here’s a typical question and how we answer it:
Company car allowances policies are often some of the most overlooked policies in the organization. But these policies are more important than many people realize.
A company car is a huge perk. Employees get to drive a nice vehicle without all the expense and liability. The company can attract top talent while projecting a uniformly classy and trustworthy...
Many organizations have employees who operate vehicles for business purposes. Some issue company vehicles while others reimburse the use of personal vehicles or pay a car allowance. What happens when...
Paying an equal car allowance or mileage rate has long been the norm. But today's economy requires a different approach. It starts with a standardized vehicle.
With so much of today's workforce gone mobile, a responsive business vehicle program is a must. The secret is to start with a standardized vehicle, not a standardized rate. This guide explains how.
It pays to outsource the administration of your company car allowance policy. Here are the top ten reasons why.
If your company gives a gas card to employees or reimburses their fuel costs, it can be a challenge to control these costs. Here are three strategies to reduce costs while continuing a gas card...
Sales reps are responsible for bringing business your way and securing long-term relationships with clients. To optimize sales, it is vital to provide a robust, sufficient vehicle reimbursement...
Your standard auto allowance plan probably isn’t IRS-compliant. In this Q&A we'll tell you why, and how to create an accountable auto allowance plan.
From time to time, we like to feature a question we have received. This time, the question is about whether a fixed and variable rate reimbursement (aka FAVR car allowance) is superior to a...
Your employees’ car insurance can cost the whole company if the coverage is too low. All it takes is a single car accident. You can protect your organization by following these guidelines for...
The IRS mileage rate was designed to be a tax deduction tool for individual taxpayers, but it has become the standard rate for business vehicle reimbursements. The results are costlier than you think.
If your employees travel for business in personal vehicles, and receive a car allowance, that allowance may violate California’s labor code. CA Labor Code, Section 2802(a), requires full coverage of...
If your company pays for its employees’ gas, you’ve bought yourself a costly problem. To avoid a fuel card or fuel reimbursement disaster, it’s time to start exploring other options.
It’s an HR manager’s worst nightmare. While working, an employee causes an auto accident with injuries. And the employee was uninsured. This is why businesses should mandate and verify employee auto...
The state of California has the strictest labor laws in the country when it comes to auto allowances and vehicle reimbursements. Whether your company pays a monthly allowance or the IRS mileage rate,...
When many of your workers are out on the road making sales calls, meeting with clients, or delivering merchandise, managing their productivity is important. But no one wants to be micromanaged or...
If an employee causes a car accident while on the job, the company will likely face some liability. Vehicle accidents are one of the leading causes of work-related injuries and fatalities. Let's...
Employees who drive a personal vehicle for work often receive a vehicle allowance to offset costs. Most people receive the allowance as a monthly lump sum. But does that monthly payment cover all...
Your employer may provide you with a car allowance or a mileage reimbursement to pay for the business use of your personal vehicle. If your job requires you to use a vehicle to carry out...
Your organization can craft a vehicle reimbursement plan that retains valued employees. The key is a data-driven approach that builds a culture of transparency and trust.
A standardized mileage rate, such as the IRS rate, and employee-reported mileage both can make it hard to control costs while supporting employees sufficiently – here are three best practices to fix...
If you drive a personal vehicle for work, your employer may pay a mileage rate to offset the costs you incur. Once you know the mileage rate, it's easy to calculate the reimbursement. But is that...
When it comes to providing a car allowance or reimbursement to employees, it is important to craft a financially sustainable plan. Here are five ways to achieve accurate reimbursements without cost...
An IRS-approved, tax-free plan, the fixed and variable rate (FAVR) allowance reimburses employee vehicle expenses accurately and equitably. Leveraging data to reimburse auto expenses, FAVR is more...
You don’t have to overpay to reimburse your employees – unless, that is, you’re paying the IRS standard mileage rate. With ease comes a price, but there are alternatives.
A company car is one of the most attractive benefits an employee can receive. But the IRS tax rules surrounding business vs. personal use of a company vehicle can be a challenge to administer.
Policies governing employee vehicle use and reimbursement affect many areas of an organization. The key is to fit these policies to your core objectives while boosting employee satisfaction and...
A car allowance is the simplest way to offset an employee’s cost of operating a personal vehicle for business use. Many organizations pay the allowance every pay period as taxable compensation,...
Every HR leader wants to ensure that employees are treated with fairness in compliance with applicable laws. When it comes to vehicle reimbursements, a fair, compliant policy can go a long way to...
In 2017 Congress passed a massive tax reform for the years 2018-2025. Under the rules of these tax years, paying a taxable car allowance just isn't worth it.
In a report last year, LinkedIn estimated that the cost of losing an employee often equals 1.5 to 2 times that employee's salary. Here are some ways to calculate that cost – and to determine whether...
For most organizations that employee a mobile workforce, the vehicle reimbursement plan may be viewed through the lens of employee benefits or budgeting. But the tools you use to reimburse drivers...
How do you measure the productivity and efficiency of your mobile workforce? Your organization's mileage log may be an underutilized tool to provide the data necessary to improve productivity and...
Mileage logs are necessary if you pay a mileage reimbursement or fuel reimbursement. The type of mileage log you use can significantly increase or decrease company costs.
As we discussed in our last post, it is vital to base your vehicle reimbursement operating budget on vehicle expense data. This will help your organization control costs. But there are a few key...
The travel and expense (T & E) category of an operations budget is one of the toughest to control. One easily overlooked subcategory is reimbursement for vehicle travel. Performing a review of this...
Each year, the IRS updates its rules and guidelines for non-taxable, accountable vehicle reimbursements. If your organization uses or is considering a FAVR car allowance, here's what you should know.
On December 29, the IRS released the 2023 federal mileage rate for business use. The exact amount of the increase is less important than how the federal mileage rate is used.
Offering a competitive car allowance in 2023 could get expensive. Auditing your policies can help you boost driver benefits while reducing costs.
The story of 2022 heading into 2023 is inflation. Everyone is experiencing higher costs. One way for your business to reduce costs is to switch from paying a standard car allowance to a tax-free car...
A company car is an amazing perk to an employee. But it is a high expense for an employer. With the prices of new vehicles at historic highs, 2023 is a good time to consider alternatives. Here are...
What's an industry standard car allowance? Turns out, most companies ignore their employee car allowance when they could instead turn it into a business tool to attract and retain talent.
The Illinois Wage Payment and Collection Act, California's Labor Code Section 2802, and other state labor laws require full reimbursement of employee business expenses. In an inflationary economy...
The fixed and variable rate allowance (FAVR) provides a tax-free, defensible, and cost-effective tool to offset employee vehicle expenses.
With mobile employees facing historically high vehicle-related costs, now is the time to re-calculate your car allowance vehicle reimbursement.
2022 has been an expensive year for most businesses. As you head into 2023, your business may be weighing whether to pay a car allowance or mileage reimbursement to employees. Our answer may surprise...
The year 2022 brought record-level vehicle expenses, which has put a lot of financial stress on employees who drive as part of their jobs. How has your organization responded? Here are four ways to...
Whatever the circumstances of your employees – working from a vehicle, working from home, or working in the office – it is important to know their state's reimbursement laws. In states that require...
We often get asked by company managers or employees who drive for work how much auto insurance they should carry. Different states have different required minimum coverages, but all of these fall...
If your company pays a monthly vehicle stipend, 40% or more of that money could go to federal and state coffers. With tax withholding reducing so much of an employee's take-home from a car allowance,...
Now that gas prices have fallen from this summer's historic highs, it is worth considering how to plan for future fuel price volatility and its effects on your business. Adopting a FAVR vehicle...
Businesses that use the IRS mileage rate to reimburse employees are using the wrong tool for the task. Let's look at three key reasons to avoid mileage reimbursement at the IRS business rate.
Do you plan to run a motor vehicle record (MVR) check on all your employee drivers this year? If not, you should. You can reduce your company’s risk profile by instituting annual or bi-annual MVR...
Many organizations pay a mileage rate to reimburse workers for the use of a personal vehicle. But how do you know it accounts for all reimbursable vehicle expenses? Some expenses like auto insurance...
Record vehicle prices and inflation in vehicle costs raise the question of whether to continue offering a company vehicle to employees. Some organizations might considering switching some or all...
When deciding on a mileage reimbursement rate, many companies look for guidance to the published standard mileage rates from the IRS. But the question of whether to pay that exact rate to employees...
With inflation at a 40-year high, and fuel costs being a primary driver, is it time to increase your car allowance? The short answer is "Yes." But the way to do it might not be what you expect.
Proof of employees' auto insurance will not be enough to protect your business in the event of an accident. It is vital to keep records of each employee's insurance policy declarations pages. Read on...
What is your car allowance amount based on? If it’s not based on data, you could be in trouble. You may be overpaying or underpaying. You may face increased attrition rates or productivity losses or...
Thinking about adding a fuel card or fuel reimbursement to your car allowance? in times of high gas prices, this is a common consideration. Here’s what you need to know.
With gas prices at record levels, it raises the question of whether a company's car allowance or vehicle reimbursement program should factor in the fuel efficiency of the vehicles being used.
GPS mileage apps are quickly becoming the preferred way for both businesses and independent contractors to keep track of mileage for work and tax purposes. Along with these apps come privacy concerns...
Effective July 1, the IRS has increased the standard business mileage rate for 2022 by 4 cents per mile to 62.5 cents per mile. Due to the inherent limitations of reimbursing with this mileage rate,...
If you pay a car allowance to employees working in the state of California, be aware that these workers face a unique set of conditions. Between strict labor laws and high vehicle expenses,...
For companies that pay a vehicle reimbursement to employees, the IRS mileage rate has often been viewed as the gold standard. However, the mileage rate's lack of transparency is causing employers...
While there's no federal law requiring employers to reimburse their employees' business vehicle expenses, many companies choose to – and for good reasons. Let's explore ways to determine whether and...
Most businesses experience both fixed expenses and variable expenses. Knowing the difference is important, especially if your organization reimburses employees for their business vehicle expenses.
You company's car allowance covers a wide range of employee vehicle expenses. If it is not high enough, the allowance could impact your employee retention. If you have not adjusted the allowance...
The car allowance is one of the most overlooked business tools within most organizations. It seems simple enough and easy to maintain. But the simplicity of a standard monthly payment carries hidden...
Mileage reimbursements for employees are standard in many industries. The approach is straightforward and seems fair. But the IRS-approved FAVR mileage reimbursement is being touted as a more...
Wondering what portion of your mileage reimbursement rate should cover fuel costs? There is a way to calculate it and help determine whether your reimbursement rate can handle the recent spikes in...
High fuel costs are here to stay for the foreseeable future. With both gas and diesel prices at historic highs and no end in sight, here are some ways to protect your business.
A company provided vehicle has always been a huge perk. However, recent trends have made it more expensive to maintain a company fleet. Is switching to a car allowance or vehicle reimbursement a...
In 2017, California approved a law that increases the gas tax every year on July 1 based on the California Consumer Price Index. As gas prices continue to rise, business owners face serious...
In times of high gas prices, organizations that pay a car allowance feel pressure to provide employees with a gas card or fuel reimbursement. However, there are more cost-effective ways to protect...
A growing number of states have expense indemnification labor codes. If your organization pays a car allowance or vehicle reimbursement, here’s how to ensure your compliance – even in times of high...
It's tax season again and time to review the IRS rules regarding business mileage deductions. The Tax Cuts and Jobs Act (2017) made major changes to the rules around miscellaneous tax deductions that...
With prices at the pump spiking, standard car allowances are being outstripped by driving expenses. Switching to a non-taxable car allowance could help employees while reining in high costs.
Gas prices are spiking, adding even further to inflation. Understanding how this will affect employees who operate a vehicle for your company is important.
As vehicle expenses increase, employees may complain that their car allowance isn't enough. Some employers may try adding a fuel card or fuel reimbursement. Others may switch entirely to a mileage...
Interest in FAVR vehicle plans, also known as fixed and variable rate car allowances, is on the rise. Many organizations are wondering about this alternative to a standard taxable car allowance....
The past three tax seasons have placed taxable car allowances under scrutiny because employees can no longer deduct business mileage to offset their taxes. Businesses are turning to non-taxable...
Car allowances remain one of the most popular ways for employers to offset their employees' business vehicle expenses. However, few organizations take time to calculate a fair amount based on...
Every year, when the IRS releases its new standard mileage rates, a new maximum standard automobile cost for FAVR programs is released. The cap for 2022 was increased significantly over 2021.
Many organizations pay a car allowance only to realize that after taxes the car allowance doesn’t cover employees’ costs. So they add paying for employees’ fuel. But paying for fuel is not as easy as...
Paying a car allowance with mileage substantiation? The time is now to re-evaluate your policy in light of current federal tax policy and economic pressures facing employees who drive personal...
In 2022 take advantage of opportunities to offer a competitive car allowance and provide certainty for valued employees. After two years of disruptions, predictability of business reimbursements is...
It is often standard practice to reimburse vehicle expenses using the IRS business mileage rate. In the past, the IRS rate was often sufficient to comply even with California's strict labor laws....
If you can’t quantify what your car allowance covers, you could be in trouble. Vehicle costs have risen significantly, and employees no longer have the ability to deduct business mileage on their...
As the prices of new and used vehicles continue to rise and gas prices remain historically high, businesses are increasingly forced to ask whether the company car is still worth it.
As the fourth quarter begins, we near the fourth year in which employees who receive a car allowance cannot write off mileage on their tax returns. This reality combined with rising gas prices,...
If you provide a vehicle reimbursement to employees working in Illinois, gas tax increases could put your organization in a bind. The IRS business mileage rate cannot guarantee compliance with the...
Every organization with employees who operate a vehicle on the job should have a vehicle safety policy. Addressing distracted driving is a key way to strengthen your organization's policy and reduce...
When it comes to labor law, California has set the bar high when it comes to preventing employers from passing along expenses to employees. Here's a quick overview of CA Labor Code Section 2802 and...
Mileage reimbursements face scrutiny when employees discover that their rate isn’t covering their costs, even if you are using the IRS mileage rate. How will you answer when an employee asks you to...
As your business evaluates business vehicle plan options for 2021, adopting a fixed and variable rate reimbursement, also known as a FAVR car allowance, should be high on your list. Find out why we...
California's ballot initiative, Proposition 22, passed by a 58 - 42 margin. What does this mean for other states?
Your mileage reimbursements are only as accurate as your mileage tracking. Ensure that you’re equipped with the best electronic mileage logbook available.
With most restaurants shifting to take out and delivery over the past two months, many owners face the new challenge of properly reimbursing employees who have converted to delivering food to...
If your organization provides a company vehicle to employees, now is a good time to evaluate the tools you are using to support this program. Adopting effective personal use chargeback procedures and...
If your organization tracks employees' business mileage for tax purposes or reimbursements, it can be a tedious process. With the new generation of mileage trackers like our mobile app mLog, mileage...
With the COVID-19 pandemic forcing the majority of Americans to stay home, much of our workforce has gone remote. Under some state labor codes, that could require employers to take on additional...
[Updated] On January 1, 2020, a new law went into effect in California that re-classifies many independent contractors as employees. California Assembly Bill 5 in combination with CA Labor Code 2802...
