UNDERSTANDING THE ROI - Gives you leverage when it comes to spend objectives. Ultimately as a company, you can save money, and put more money back into the employee’s pocket. This means, an increase to the company’s bottom line, and helps with attracting and retaining top talent. To see if you qualify for a tax free program, contact me to schedule a complimentary program assessment.

1. BUSINESS VEHICLE PROGRAM
FLAT ALLOWANCES
# of drivers on an
allowance plan
100
$ a month per
employee
$500
average miles per
employee per year
12,000
total annual
employee tax waste
Flat Allowances by the Numbers
$180,000
WE WORK
WHERE YOU WORK.™
Business Vehicle Programs are designed to meet different business needs.
As those needs change, organizations need to be flexible by not locking
themselves into one specific program. According to a World at Work
survey underwritten by Runzheimer, 64 percent of companies use two or
more programs in tandem. The best solution is dependent on what works
best for your company and your mobile employees. Business leaders
need to understand the fundamentals of the different types of available
business vehicle programs to make an educated decision. The following
is an overview of an allowance program, why organizations choose them,
and a financial comparison to an alternate, tax free program.
Allowances are best suited for organizations that want simplicity and
are not concerned with the tax burden. Most employees perceive flat
allowances to be a fair reimbursement method because these programs
are so easy to understand, administer and all participants receive the same
amount. The reality of an allowance plan is that infrequent drivers are
over reimbursed for business driving and your road warriors are under-
reimbursed—making an allowance program inequitable. Allowances are
also considered a form of compensation, not an expense, creating a tax
liability for both the employer and the employee. If an employer wants
their employees to net a certain dollar amount, they will need to tack on a
significant cushion of up to 30 percent to account for taxes.
Allowances are fixed amounts that often don’t represent a particular
traveler’s driving habits, such as the number of miles they log or their
local fuel costs. They are also taxable for both employers and employees.
Allowances can be treated as an extra benefit for employees, functioning
like a bonus. Because of this, employers are often hesitant to move to a
more fair and equitable program for fear of “unhappy employees.” Once
you do the math, however, the answer seems pretty simple.
WHY USE AN ALLOWANCE?
CONSIDERING ALTERNATIVE OPTIONS

2. Runzheimer, a business vehicle technology, and solutions provider is the recognized leader in mobile workforce management. We
help organizations increase agility, reduce costs, and improve satisfaction through fair, accurate and defensible™ reimbursement
programs. Our solutions deliver an effortless experience for employees while providing data, visibility and actionable intelligence
for managers and executives. We understand the mobile workforce is driven by data. Our technologies integrate with your big data
tools—building on and enhancing the systems you have in place today.
It is our mission to offer mobile technology and solutions that connect people, companies and their vehicles to drive superior
productivity and valuable business intelligence. We work with our customers to ensure their needs are always met, and we remain
dedicated to surpassing their expectations.
info@runzheimer.com
800.558.1702
runzheimer.com
Copyright © 2017 Runzheimer
If you have an allowance program in place and want
to see if you qualify for a tax free program, schedule a
complimentary program assessment with one of our
business consultants.
The tax implications of a vehicle allowance put a significant
burden on the employee. In the example shown at left,
an employee only receives about $335 of a $538 vehicle
allowance after taxes are applied. If you have a mobile
employee base that is geographically dispersed and drives
more than 5,000 business miles a year, it is wise to consider
a tax free program like the Runzheimer plan.
The Runzheimer Plan, or fixed and variable rate
reimbursement, is widely considered a “best of breed”
program that blends the fixed costs of operating a vehicle
with geographically specific variable expenses (such as
fuel) to produce highly accurate reimbursements. Fixed and
variable rate programs are the fairest, most targeted option
for any organization, regardless of company size.
Participants in the Runzheimer Plan receive a fixed sum
which is designed to cover insurance, taxes, depreciation
and registration. Employees are also granted a variable
cents-per-mile reimbursement scaled to the price of gas
locally, which accounts for the cost of fuel, maintenance, oil,
tires and other incidental expenses. This structure allows
employers to provide fair and accurate reimbursements
based on where mobile employees live and work.
Want to calculate your company’s potential savings?
Click or visit the link below to learn more.
https://app.snapapp.com/Allowance-Assessment
FAIR, ACCURATE AND IRS COMPLIANT™
UNDERSTANDING THE ROI
WHAT NOW?
$200
$0
Cash in
Driver’s
Pocket
Income Tax FICA/FUTA
$400
$203
tax
waste
Vehicle Allowance Runzheimer Plan
$335 $335
$165
$38
$538 Total
$335 Total
Jeff Warrensford
Major Market Consultant
Direct: 678-468-6934 & JSW@Runzheimer.com