3 Simple Steps for Setting Up a Vehicle Reimbursement Program
CarData Vehicle Reimbursement/Car Allowance programs incorporate all of the variable and fixed expenses for owning and operating a vehicle, and is built on verifiable and accurate data, resulting in programs that increase efficiency, and employee satisfaction, while reducing administrative burdens.
AMHERST, N.Y., Dec. 18, 2017 /PRNewswire/ -- Vehicle Reimbursement Programs (VRPs) reimburse a company's drivers for the expenses of driving their personal vehicles while on company business. The objectives of a VRP are:
- payments based upon verifiable, audit ready, accurate measures
- fairness to drivers
- ensure the company is not overpaying for vehicle related expenses
- reimburse drivers the maximum non-taxable value
There are three steps to building an accurate vehicle reimbursement program that is IRS compliant. IRS compliance means following the IRS Revenue Procedures governing a VRP, permitting payments to be designated as 'reimbursements' and not as 'compensation'.
THE THREE STEPS
- Select a Standard Vehicle Profile: choose from CarData's vehicle categories to select the profile that suits the job requirements, for example a sedan for salespeople or a pickup truck when the job requires cargo space
- Input the Driver Location: this produces reimbursements based on region and territory
- Assign a Mileage Band: for example, 20,000-25,000 miles per year; select from bands of 5,000 to 50,000+
The Three Step set-up produces rates according to the IRS FAVR guidelines – Fixed and Variable Rates.
The Fixed Rate reflects the costs required to put a vehicle on the road, to have it ready to drive. These are committed costs to buy a vehicle, and to plate and insure the vehicle to make it legally roadworthy. These expenses are in CarData's VED (Vehicle Expense Database) and are used to calculate the monthly Fixed Rate. The monthly Fixed Rate is denominated in dollars per month.
The Variable Rate reflects the ongoing costs of running a vehicle and maintaining its mechanical fitness. The Variable Rate is denominated as cents-per-mile. The Variable Rate is comprised of fuel costs plus a proportional amount for maintenance, oil, tires and repairs. These expenses are in CarData's VED (Vehicle Expense Database) and are used to calculate the monthly Variable Rate.
The following is an example of a monthly reimbursement for a driver in Boulder, Colorado.
| Fixed Rate |
in driver's territory |
$352.17 |
|
| Variable Rate |
18.89 cents-per-mile X example 2,000 miles |
$377.80 |
|
| Total Monthly Reimbursement |
$729.97 |
||
Rates will vary by driver location and the number of business miles driven each month. It is a simple Three Step process to set up a sales team of drivers in their own specific reimbursements.
Learn more about CarData's Vehicle Reimbursement Solutions here: https://cardataconsultants.com/vehicle-reimbursement/
About CarData Consultants CarData provides precision vehicle reimbursement programs for the mobile workforce. CarData services save money, reduce risk, and remove administration. CarData programs are compliant with the IRS and the CRA procedures.
MEDIA Contact: Megan Dean
Marketing Communications | CarData Consultants Inc.
Direct: 303-434-3307 | FAX: 929-235-7525
[email protected]
www.cardataconsultants.com
SOURCE CarData Consultants
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