Employee’s Vehicle Allowance

Whether your company supplies business vehicles to employees as “perks” or as necessary tools to help get their work done, their personal use of the vehicle has tax implications.  An employee’s personal use of a company vehicle generally must be treated as a non-cash fringe benefit that is also subject to social security taxes.  Fortunately, the tax rules give you some flexibility in valuing personal usage of a company vehicle.  You can choose from among four valuation methods: The general fair market value method, which is based on what a person would pay locally to lease a comparable vehicle for a period of time comparable to the period of time the employee has use of the vehicle;  The lease value