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Author: admin | Category: Auto Rate Calculator | Date: 23.02.2016

When organisations look to review their fleet policies, one of the most common questions we are asked is how they should determine their car allowances in an employee’s total remuneration package (TRP).
This article will look at how to determine the car allowance cash figure in lieu of providing a car from the employer’s perspective, understanding that the value that is usually shown in a TRP for the value of the vehicle is not directly interchangeable with a cash component. The rates and figures used in the below examples are current at the time of publication (November 2015) and will fluctuate from year to year, so it is important to revisit these calculations each time a cash component has been requested.

Sarah has been offered a job with ABC Pty Ltd and part of her TRP includes a company car to visit clients, shown on her TRP with a nominal value of $14,000. Many organisations offer the option of a business supplied car (either one they own or lease) or the employee can take a cash component in lieu of the company car to use towards their own personal vehicle finance, a novated lease (if the employer allows it) or simply pocket the cash.

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