car allowance tax

Ah, the thrilling world of car allowance tax—where the government takes a bite out of your company car benefits. In Australia, a car allowance paid by your employer is generally considered part of your taxable income, so you’ll pay tax at your marginal rate. However, you can claim work-related car expenses to reduce the taxable amount, provided you keep meticulous records or use the cents-per-kilometer method.

Key points:

• Car allowance is added to your income and taxed accordingly.
• You can claim deductions for business-related car expenses.
• Records must be kept to substantiate claims.

For precise details and to avoid the taxman’s wrath, check the ATO website or chat with a tax professional. Or, if you’re looking to buy or lease a car to take advantage of allowances, have a squiz at Tradingpost or CarShowroom.