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Mileage reimbursements

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Newbie

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Hi,

I am a health professional that works in the community travelling across the entire Greater Sydney area.
Over the last three years I have had multiple employers who reimbursement me for my mileage costs uses a odometer log that I submit at the end of each month. I am paid this money as a ‘reimbursement’ tax free as it is to compensate for the cost of running my car. I get paid $0.66 per kilometre.

I have one previous employer this tax year who has paid this contributions under ‘wages’ but noted on the payslip as car reimbursement. On the ATO submission they have listed the total kilometre reimbursement as ‘total allowances including commissions, directors fees, bonuses, tips or consultation fees etc’
They have also withheld tax on these reimbursements

This ‘bonus’ they have entered to the ATO has caused my income to exceed $90k which means I owe a huge sum of money to the ATO in the Medicare Levi.

How should I proceed to fix this? Can I amend this in my online tax declaration by removing this amount of money from the ‘total allowances’ section? I have the evidence to support that this income was km reimbursement and not a bonus

I note that no other employer has declared the reimbursement to ATO as this would be considered not tax deductible as it’s a reimbursement for costs I incur to run a car that I only have purchased because of my job. Or do I need to contact my previous employer to have them amend the submission?

Thanks for your help
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Best answer

Champion

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Hi @aisling_1234 

 

Your employer may need to submit an amended payment summary to correct their error, more details here.

 

What the employer has likely done is set up your reimbursement as an allowance in the system which is taxable, a reimbursement however simply - by way of paying you back - claims the costs of whatever it is they are reimbursing - hence has no effect on your personal taxes.

 

 

2 REPLIES 2
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Best answer

Champion

Replies 0

Hi @aisling_1234 

 

Your employer may need to submit an amended payment summary to correct their error, more details here.

 

What the employer has likely done is set up your reimbursement as an allowance in the system which is taxable, a reimbursement however simply - by way of paying you back - claims the costs of whatever it is they are reimbursing - hence has no effect on your personal taxes.

 

 

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ATO Certified

Community Support

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Hi @aisling_1234


Essentially your employers up to now have been doing whats noted under Reasonable allowance amounts.

 

Thanks @ariellead for your response as well, good help.  Equally though now if its been included as income and is eligible you should be able to claim a travel deduction  which should balance everything up overall and not leave you disadvantaged.

 

Hope this helps and good to have you engaged in our community.

 

Thanks

MarkA