Motor Vehicle Allowance Tax Variation 2023-2024

Each year REEF makes an application to the Australian Tax Office seeking a variation so that REEF members can pay their employees the relevant award-based motor vehicle allowance without having to deduct PAYG withholding tax.

This application has again been granted for the 2023-2024 financial year.

A copy of this variation can be obtained from REEF upon request but must not be given to the employee.

Please note that this variation does not mean the allowance is ‘tax free’. 

Employees are still required to justify the allowance when they lodge their personal tax returns.  Motor vehicle allowances paid to the employee must be shown on their annual payment summary under the allowances section. 

As such, some employees may prefer to have tax deducted from their motor vehicle allowance and employers should accommodate such requests.

Unless you are holding a private tax ruling, non-REEF members must continue to tax motor vehicle allowances paid to their employees.

If you need guidance in applying this variation to your employees, please contact the REEF helpline on 1300 616 170