Here's how to know which of your employees used your fleet of company cars so you don't incorrectly tax them
Do you have a growing collection of company cars? Do you also have a growing number of employees that use them?
This is a sign of good financial growth but it can also lead to major headaches when you need to calculate fringe benefit tax.
For example, if you need to work out an employee's tax on his car usage, you may need to check the actual mileage on the car. If you check the wrong car, you might incorrectly tax your employee and that could cause all kinds of problems.
Luckily, we have a solution for you so you don't incorrectly tax your employees...
Here's the solution to this company car fringe benefit problem
The best way to deal with this problem is to create an organised system to manage who uses what car.
To start with, create a register of all the company cars employees can use and all the employees that normally use them.
If your employees only use the car for a day and then return it with the keys, you must create a storage solution where employees can place keys with a label of the car's licence plate number.
Then when they come to collect a car the next day, they must take a key and sign and date the register next to the corresponding licence plate number. This way you always know who used which car and when.
But there's another thing your employees must do to help manage this process.
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Your employees must keep a logbook to help with this process
Your employees must keep a logbook and they must always include the licence plate number of the car they drove on each trip.
This will help you match the kilometre they say they drove with the correct car's mileage.
Use this system to correctly workout their fringe benefit tax every month.
PS. Here are 47 things you never knew about allowances and deductions
that can put money back in your pocket... There's nothing better than getting money back from SARS.
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