Flat Rate Allowance Seems Fair…But it’s Not​

It’s easy to pay a predetermined amount each month to employees who drive their personal vehicles on company business. Unfortunately, a flat rate vehicle reimbursement program doesn’t factor in variable costs. And it doesn’t acknowledge human nature. Customer relationships can suffer when an employee believes the flat rate does not cover their vehicle costs. CarData VRPs calculate the real costs and build in flexibility that makes the program fair to employees and valuable to the business.​

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VRP vs. Flat Rate, Head-to-Head​

Let’s break the essential points down​.


Taxes & Taxes

  • A flat rate allowance is all taxable money because it doesn’t qualify for non-taxable status. Provide a fuel card, and the IRS/CRA says the personal gas should be taxable too.​
  • Vehicle reimbursement programs substantiate business travel and are recognized by the IRS as non-taxable strategies reflecting business expenses for the company and employees.

Flexibility & Fairness

  • Flat rate allowance doesn’t account for changing gas prices, regional insurance rates, and state and local taxes.​
  • A VRP from CarData adjusts for all costs and is even customized to driver territories.

What’s Best for Business

  • Flat rate allowance doesn’t acknowledge the difference in costs for a driver who travels 500 miles and one who travels 3,000 miles; under- and over-compensation are implicit.​
  • A VRP reimburses real business mileage, fosters driver-neutral behavior and eliminates risks associated with fuel cards.

“The vehicle reimbursement program we were using had our people moving in and out of compliance with IRS rules. Continue reading “Vice President Human Resources – Fortune 500 Company” »

- Vice President Human Resources, Technology Industry

“Prior to switching to CarData for our vehicle reimbursement plan, we managed an in-house fleet program. However the practicality of the program began a steady decline not long ago, both in terms of costing and resource allocation. Continue reading “Testimonial – Company Car Fleet” »

- VP Human Resources, Housing Industry

“Placing our vehicle reimbursement program into the hands of CarData was one of the best decisions for our company. The modern technology and easy-to-use system that they offer is second to none. Continue reading “Testimonial – Driver Benefits” »

- Director Purchasing, Chemical Company

“The online application is simple to use, and our employees love being able to have access through their mobile devices. This technology has made a big difference in terms of compliance. Employee buy-in was almost seamless, which in our industry is worth its weight in gold! Continue reading “Testimonial – Modern Technology” »

- Benefits Director, Beauty Industry

“Our company cars were costing us too much and they were getting older. We wanted a plan that was industry competitive and that produced some cost savings. Continue reading “Chief Financial Officer – Resource Industry” »

- Chief Financial Officer, Food Industry

Interested in seeing how CarData could transform your vehicle reimbursement program?

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