Sally uses her personal motor vehicle for business purposes and receives an allowance of 66 cents per business kilometre. In 2019, Sally drove 150 kilometres for business purposes and received $99 in allowances.
$0.66 × 150 km = $99
Since the rate used to pay allowances to Sally is 66 cents and in line with the exempt rate as determined by the ATO for the 2019 financial year, the total allowance of $99 paid to Sally is exempt for payroll tax.
Jackson received a fixed motor vehicle allowance of $12,000. His log book from 1 July 2017 to 30 September 2017 shows he travelled 30,000 kilometres. The business portion was 10,000 kilometres. For the 2018-19 period, Jackson travelled 40,000 kilometres.
The averaging method is used to calculate Jackson’s exempt kilometres.
Therefore $8,800 is considered exempt wages and the remaining $3,200 is liable for payroll tax.
Peta received a fixed motor vehicle allowance of $1,000. No log book was completed.
Without records and log books, the total $1,000 motor vehicle allowance paid is taxable wages for payroll tax.