FUEL ALLOWANCE

COMPLETE
COMPLETE Member Posts: 5 ✭
in Reckon Accounts (Desktop)

I have a new young employee that I wish to add $50 to his wage each week to cover his fuel costs. He will not be claiming these fuel costs as an expense, so does he need to declare it in his income? If not declaring it in income, my guess is I would set it up as a net (no tax) allowance and not subject to super component either. Does this mess things up with STP, I don't want to get to the end of the financial year and discover I've made a headache for either him or me!

Comments

  • Acctd4
    Acctd4 Accredited Partner Posts: 3,188 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert

    Yes, this scenario means the fuel payment would be classed as "Ordinary Time Earnings" (OTE) (because it's paid regardless of the amount actually expended & is not able to be claimed as a tax deduction by the employee)

    It is taxable income to the employee & therefore it needs to be setup as an Allowance Payroll Item with PAYG Tax & Super both applicable.

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

    *** Reckon Accredited Partner(AP) Bookkeeper - specialising EXCLUSIVELY in Reckon Accounts / Hosted ! ***

    * Regd BAS Agent (No: 92314 015)* ICB-Certified Bookkeeper* Snr Seasonal Tax Consultant since 2003 *

    Accounted 4 Bookkeeping Services

    Ballajura, WA

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    (NB: Please give my post a Like or mark as Accepted Answer if I have been able to resolve your query as this helps others when seeking solutions!)
  • COMPLETE
    COMPLETE Member Posts: 5 ✭

    Thank you! Much much appreciated.

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