Can mileage (cents per km- 85 cents) be paid through AP run?I have paid this via payroll for years- once over 5,000km this would become taxable. We have new 'owners' and they are wanting to pay via AP but this seems like they are avoiding this showing on their income statements.
Hiya @Harbour_M 👋
Cents per kilometer allowance is now and has always been required to be reported as income with the other payments to employees, such as salary and wages. With STP, the obligation is to report it "on or before payday".
It's a payroll transaction, not an accounts payable transaction. It's important that the new owners understand their legislative obligations, subject to penalty.
Deanne
Hiya @Harbour_M 👋
Cents per kilometer allowance is now and has always been required to be reported as income with the other payments to employees, such as salary and wages. With STP, the obligation is to report it "on or before payday".
It's a payroll transaction, not an accounts payable transaction. It's important that the new owners understand their legislative obligations, subject to penalty.
Deanne
Great, thanks so much for your reply! That was my understanding as well
Thanks @py_deanne. They replied with the following.
I think that’s if it's paid as an allowance – I received tax advice that it could be paid as a direct reimbursement, not as an allowance.
The form they sent for processing had the km's travelled and at the rate of 85 cents.
Can you provide me with further information as this person will be receiving the payments.
Thanks
@Harbour_M, the ATO guidance explains what the c/km allowance compensates.
How would an employee obtain a receipt (required for reimbursements) for a tax invoice that detailed the precise amount of the costs they incurred for insurance, servicing, depreciation etc that was the SAME amount for every employee?
Not a reimbursement.
Read this post about c/km allowances.
Deanne
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