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Car Allowance Tax Exemption 2020/21

Car Allowance Tax Exemption 2020/21

REEF's application to the Australian Taxation Office for an exemption from the requirement to deduct tax from an employee's award-based car allowance has once again been granted for the 2020/21 financial year.

Each year, REEF applies to the Australian Taxation Office (ATO) for an exemption so that our members can provide their employees with the relevant award-based car allowance without deducting tax.

Without the variation authorised by the ATO, the car allowance is effectively assessable income to the employee and subject to tax at the time it is paid.

The ATO has advised that our request has once again been granted for the 2020/21 financial year. A copy of the exemption can be obtained from REEF upon request.

The variation of the tax deduction on car allowances only applies to financial members of REEF. Real estate employers who are not REEF members are not able to rely upon this tax exemption.

The amounts paid to the employee for car allowances must still be shown on their annual pay summary under the allowances section, yet no tax is to be withheld.

Employees may still request to have tax deducted from their motor vehicle allowance and employers should accommodate such requests.



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About REEF

The Real Estate Employers' Federation is the real estate industry’s leading not-for-profit employer and workplace relations advisory association. It has more than 1600 members and subscribers across Australia.

Each year, REEF receives more than 18,000 calls from real estate employers needing help and guidance on matters affecting the employment relationship.

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     Sydney  NSW   2000
           Australia

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