Payroll Q&A ‘ Treatment of cents per KM car allowance in excess of 5000kms
An organsation pays cents per KM car allowances in relation to business travel – what is required re PAYG Withholding and Payment Summary reporting?
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Question
Our organisation pays cents per KM car allowances in relation to business travel – we pay at a cents per KM rate above the ATO approved rate of 66 cents and the employees claim more than 5000kms per annum – what is required re PAYG Withholding and Payment Summary reporting?
Answer
| The ATO position is set out at https://www.ato.gov.au/Business/PAYG-withholding/Payments-you-need-to-withhold-from/Payments-to-employees/Allowances-and-reimbursements/Withholding-for-allowances/
The position for all situations is shown below.
|
In the situation in question the outcome is:
Allowance re 0-5,000KMs:
Withholding required on the excess of the cents per KM rate paid less 66 cents per KM.
Allowance re +5,000KMs:
Withholding required on full payment for KM’s in excess of 5,000.
In both cases the full allowance should be reported on the Payment Summary and Superannuation Guarantee is not applicable.
Disclaimer: This article is based upon information available as at the time of publishing and may be subject to change.