Company Car Fringe Benefit and Travel Allowance

[J7J]

Hi,

When an employee uses a company car and also gets reimbursed for all his fuel, oil and Repairs and Maintenance Costs on the company car, should there be a "Company Car Fringe Benefit" as well as a "Travel Allowance" on his payslip? Does the Company Car Fringe Benefit not include all fuel, oil and repairs and maintenance as well?

Please advise.

Thanks!

[Dave A]

*Bump*
Can anyone help with this one?

(I've got a pm from someone asking for the answer, and I"m not confident my thought on this is the correct answer.)

[Andromeda]

Does the Company Car Fringe Benefit not include all fuel, oil and repairs and maintenance as well?

The short answer is no. They are seperate benefits.

[S De La Croes]

Hi there

Thanks Adromeda

Another quick question - If they say the company car is used for private and business use, is it standard 80% x 3.5%x Car value (incl vat) = the amount I will place in the Taxable Remuneration section of the payslip?

Another question :-) When will I use the 20% x 3.5 % x Car value in calculating remuneration on payslips?

Thank you

[Andromeda]

I am not sure I understand the question exactly, but I will try to clarify:

80% of 3.5% of the determined value is subject to paye and that amount is the fringe benefit value. If that's how you see it then yes.

The rationale is that 80% of the vehicle will be private use and 20% business use. The ever important logbook may alter the actual 80/20, but that is on assessment, so I guess never.

[Dave A]

Another question :-) When will I use the 20% x 3.5 % x Car value in calculating remuneration on payslips?

Only when you have rock solid evidence that the private usage portion will be less than 20%.

[Andromeda]

This is an old article, but a very good one

http://www.moneyweb.co.za/archive/company-car-changes-you-should-know-about/

[S De La Croes]

Thank you so mich for the feedback! I recently found a question within my assignment for Payroll. I do feel like quite a drag as I might be coming across as slow on the uptake..i just want to understand one thing.

The scenario - Dave has full access to company car. The monthly use of the car is 3.5 % of VAT incl cost of car...so when they say this my immediate thought is that 80% of the 3.5% of value of car and that answer should be placed beneath Taxable value of the fringe benefit. However, they also have company car listed on the Earnings section....what amount should be placed there? The same amount?

Thank you

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[Andromeda]

Example: 3.5% of R500,000 = R17,500 per month, = R210,000 fringe benefit value (Code 3802) for the year.

Of this, R168,000 is subject to PAYE during the year, being R210,000 X 80%

So on a payslip the fringe benefit value under the earnings section is R17,500
On the IRP5 for code 3802 the amount is R210,000

[Ngwemabala]

I think here firstly what is important is the definition of travel allowance: which is any allowance or advance to be included in taxable income, paid to the recipient in respect for any expenses incurred for business travel, as is not expended in business travel. In short this means, Amount to be included in taxable income = Travel Allowance - Business Expenditure.

[S De La Croes]

Hi All

Thank you so much for the feedback and assistance I greatly appreciate it!!