When reimbursing an employee on a business mileage basis (at ATO rate), is there a GST component ?

[#1]

Hi @TheRev

When an employee is claiming the cents per kilometre method the calculation claimable does not include GST.

[#2]

Thanks Mark. Another question - is the employee reimbursement when based on actual km at the ATO rate taxable to the employee, ie added to employee’s salary and taxed ?

[#3 · Accepted solution]

It may help if you change your terminology to "allowance" instead of "reimbursement". A reimbursement is for actual expenses incurred (e.g. a flight, tools, etc), whereas if you are paying staff $x per km, that's an estimate to cover costs - which is an allowance.

Allowances don't attract GST because they are wages. Because they are wages, the amount received by the employee is taxable and should be on their group certificate.