car allowance

Hi All,

What does "car allowance" mean here?


"basic salary plus average of all fluctuating emoluments e.g. bonus, commission, overtime, but excluding car allowance over the last 3 years of employment"

Context: Notification by the transferring employer and the acquiring employer on planned transfer of part of tasks and activities of the transferring employer (including part of employees)

Thanks,

A.

I assume that "car allowance" refers to the money that some company is willing to reimburse to some employee for transportation costs involved in operating a private vehicle for company business.

The US Internal Revenue Service allows you to be reimbursed for driving mileage at the rate of $0.565 per mile. (For the year 2103.)

If an employer reimburses at a rate higher than that the excess has to be declared as income on your tax forms.

Some employers will give an mileage allowance lower than the government allows.

So if you use your car 10,000 miles and the employer is reimbursing at the government rate of $0.565 per mile, you should receive a check for $5,650.00 which is not subject to income tax.

Thanks a lot for your answers!