Industry Recognized and IRS Approved Fixed and Variable Rate (FAVR) Plans
SAVE MONEY WITH AN IRS APPROVED FAVR VEHICLE REIMBURSEMENT PLAN
A Fixed and Variable rate program implemented and maintained by CarData will relieve the administrative burden of in-house allowance programs and ensure IRS compliance.
The CarData Online application tracks and measures IRS compliance, driver mileages, odometer readings and manager mileage approval, ensuring an accurate use of corporate resources. Regional expense recognition, and incorporating daily gas prices further increases efficiency, and culminates in the elimination of erroneous, wasteful reimbursements.
By conforming to these standards, CarData’s reimbursement payments are deemed non-taxable reimbursements and are no longer treated as compensation. Businesses are surprised to see the cost savings from a reduction of FICA payroll taxes alone.
At 7.65%, the savings on a $3,000,000 annual car reimbursement budget equals $229,500.
WHAT IS A FAVR PLAN?
The costs of owning and operating a vehicle can be divided into the categories of Fixed and Variable expenses. In a fixed and variable rate reimbursement program, Fixed expenses are calculated as dollars-per-month, and Variable expenses as cents-per-mile; amounts which are governed by the IRS procedures under the Accountable and FAVR plans.
Fixed expenses are those which do not vary from month to month, and include finance, license, depreciation and insurance.
Variable expenses are those that encompass all of the remaining and fluctuating costs of owning a vehicle. These include fuel, maintenance and tires.
By thoroughly considering actual expenses, fixed and variable rate plans produce a more fair, accurate, and transparent reimbursement model.
Ready to save money with a FAVR Vehicle Reimbursement Program from CarData?