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Can't decide between a travel allowance and a company car? These three tips will help

by , 07 July 2014
Our experts are always very busy answering questions for employers who need advice. Many of them want help deciding whether they should give their employees a company car or a travel allowances.

But it doesn't have to keep you up at night. Deciding on one just depends on you and your company.

What you can afford and how much your employee travels are just two of the factors you may need to weigh up.

We have some tips to help you do this...

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Choosing between a company car and a travel allowance depends on your company

 
When you want to choose between a company car and a travel allowance, use these tips...
 
 
Things like insurance, fuel and maintenance are all continuous expenses you must account for. If your company can't afford to keep paying for these expenses, a travel allowance is a better option.  This because with this allowance, your employee will use his own car instead.
 
 
With a travel allowance, there's no tax but you can claim it as a deduction. You just have to be careful with these because SARS is always wary of any irregularities.
 
Tip #3. Consider how much travelling your employee does. If he travels a lot, it might justify giving him a company car. If he only travels twice a month, it's not worth giving him the car so rather just give him an allowance to cover his travel expenses for those trips.
 
There you have it. We hope these three tips help you decide which of these options will suit your business better.
 


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