Auto Allowance

[Al Iglesias]

What is the name of your state? Florida

Hello everyone and a special hello to my friend Beth:

We hired an employee on 9/9/02. He is paid 10% commission on sales with expenses paid to include an auto allowance of 450.00. Just realized we failed to pay him in Sept. 02 the auto allowance which he failed to include in his expense report.

I am going to pay him a pro-rated amount. However, my question is how do I compute and pro-rate it over 1) 450/30 days in Sept. or 2) 450/20 working days (labor day excluded) times the days worked or times the days of the month?? What is normal in such a matter.

Finally, do companies that give auto allowances also pay for fuel, auto maintenance since the EVP has agreed to pay fuel and auto maintenance as well.

Al Iglesias
Controller
Kreussler, Inc.
Tampa, FL

 

[Beth3]

Hi ya, Al.

I'm afraid you need to ask some accounting/controller pals how they would handle this computation. It's really not an HR/employment law issue. Is there some web site where CPA's hang out???

As to the auto allowance, everywhere I've ever worked it's been an "either - or" thing, whether it's mileage reimbursement OR a monthly auto allowance. Both specifically included all related expenses - gas, maintenance, wear and tear on the car, etc. If your guy is getting paid $450 a month AND the company is paying for fuel and maintenance, I suspect your guy is making out like a bandit. He's got one sweet deal going.

Just out of curiosity, what exactly does the EVP think the $450 auto allowance is for if the company is paying fuel and maintenance separately???

 

[Al Iglesias]

Hi Beth :

I think the EVP sees it as a wear and tear type expense for the individual, since they travel a couple of thousand miles per month.

Well hope all is well, and by the way there is a couple of magazines like CPA Today, Practical Accountant and others that also have web links, so I will follow up there. Thanks for you feedback.

Al from Tampa, FL

 

[Beth3]

"CPA Today" - sounds like a real humdinger of a magazine.

Of course when I mention to family/friends that I enjoy hanging out at employment law sites, they think I'm nuts. Each to his own I guess.

By the way - it would probably be cheaper for the company to lease a car for this salesman (and also pay for the gas and maintenance) than to pay him an auto allowance of $450/mo for the use of his car, plus gas and maintenance.