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An allowance paid to an employee who uses their own car for business related travel is exempt from payroll tax. The exemption is capped at 66 cents per kilometre.

To claim this exemption, business kilometres must be substantiated using a log book or other method, including the Australian Taxation Office method of logging business related travel.

Allowances paid on a per kilometre basis are an exempt fringe benefit and are therefore also exempt from payroll tax.