Is car allowance taxable?

[lheimatte]

Hi Mga sis, 

would you know kung taxable ba ang car allowance?  kulet ng tanong no... ha ha ha

[rexyloise]

I'm not exactly sure what you meant by car allowance ha? our executives kasi have a certain budget to buy their car. Anything in excess is shouldered by them. Managers and up naman have a monthly gas allowance na non-taxable but we have to give gas/car maintenance/repair receipts before end of the year amounting to the total gas allowance provided.

Technically, you can use the gas allowance anyway you want as long as you can source receipts at the end of the year

[lheimatte]

Thanks sis for your reply, car allowance as in monthly fixed allowance instead of actual car.  taxable ba sya.  At my present copy I only have gas allowance which is a non taxable allowance then natanong lang ko kung ang car allowance ba eh taxable... para ikaw lang ang pinabili ng car mo tapos on installment mo babayaran and they will give you fixed amount. ganun... taxable ba sya?

[mommycute46]

Car Allowance is generally taxable. The taxation differs if you  are rank in file employee or you are a Manager/supervisor. If you are a rank in file category, this will be included in your regular income and taxed as a regular income (bracket). But if you are a manager or supervisor this will be taxed as a fringe benefits subject to final tax of 32%. Final because you will received a net of tax-- 68% only, the 32% remaining will be remitted by the employer to the BIR. That is at least the legal way, I just don't know if all corporations are honest in filing their taxes because most under declared income nowadays are normally fringe benefits Kaya nga hot issue ang mga allowances na yan lalo na kapag walang nakita ang BIR na tax remittances ang isang executive pero may narecieve siyang kotse, bahay etc

[aubb]

^ really? Grabe lang. I don't understand why they tax certain allowances.  bkit pati allowance may tax??

[aubb]

I have a notion na kaya nga "allowance" eh, parang kung allowance, allowance na, kung salary, salary. I hope to understand this. Sana may expert na mapadaan dito

[artegirl]

^sis, I think because BIR knows that "allowance" is a very loose term most often used for tax shield purposes.  Only de minimis allowances/benefits are tax exempt (there's an RR enumerating the de minimis benefits). 

Kahit pa actual car bigay sa 'yo (under car assignment program or car plan program) it is still subject to tax (i.e. fringe benefit tax).  Usually nga lang, the employees do not know this because most companies shoulder the tax

[mommycute46]

^ really? Grabe lang. I don't understand why they tax certain allowances.  bkit pati allowance may tax??

Kung lahat ng allowance ay tax free, mababawasan ang BIR collection  . Hindi makakaquota si mareng Kim. Dahil ang gagawin ng mga company, maliit na basic pero maraming allowances. Aba kahit ako yong employer mas gusto kong ibigay ng buo sa staff ko ang sahod nila kesa mapunta may mapunta sa BIR na ewan kung saan ginagastos ng mga politicians natin. Di na oy, makuntento na sila sa 32% na corporate tax noh!

[Jaguar.Paw]

so yung sayo sis parang transpo allowance ang nagyari? kung yun nga, i have the same allowance pero hindi taxable.

ang pagkakaalam ko kasi, actual car ang binibigay at reimbursement naman for gasoline. ganun kasi sa sister ko pero di nya ni grab since she has her own wheels.

[marose17]

For those with the notion (albeit, mistaken) that only basic salary is taxable:

The Tax Code provides that compensation for services in whatever form paid, including, but not limited to fees, salaries, wages, commissions and similar items forms part of gross income.

Fringe benefits have a special treatment because it is the employer that shoulders the Fringe Benefit Tax (FBT).  Historically, fringe benefits were used by employers as a tax avoidance measure.  Enrile, the principal author of the 1997 Tax Code, changed all that by introducing the FBT.  In addition, FBT applies to fringe benefits granted to non-rank and file employees (i.e., managerial and supervisory employees).

Allowances, if constituting de minimis benefits, are not taxable.  However, the BIR issued regulations specifying which are considered as de minimis benefits.  If not in the list, it is taxable.

Employers must therefore be guided by the law and the regulations in giving fringe benefits and allowances.