Considering a Vehicle Allowance?

Shawnee Love   •  
April 21, 2017

I was recently asked for my opinion on vehicle allowances.  It was an easy one to answer because I am a big fan of them for anyone who drives regularly.  In my experience, vehicle allowances are good for:auto, red pen and calculator

  1. Reducing the administrative burden of preparing and processing kilometer tracking reports,
  2. Making company driving expenses predictable each month, and
  3. Getting additional tax free money in the hands of an employee.

Another reason I like vehicle allowances, is because employers can make the allowance contingent upon certain guidelines such as the employee:

  • Having adequate insurance,
  • Providing proof of satisfactory driving record, and
  • Having an appropriate car (i.e., one that represents the employer well).

We hope you’ll come back next week for our thoughts on a company’s responsibilities when employees drive personal vehicles for work.