Mileage Allowance to Employees

[Ali123]

Hi all,

I got a questions with regards to paying mileage allowance to an employee.

I am in the process putting a job on for sales man to pitch our business.

In this job i realise he may be doing alot of miles in his car per month.

He will be using his own vehicle.

I understand the rate i can pay him is upto 45 pence per mile, which isnt taxable.

How do i show this through basicpaye, as it doesnt ask for any payments of Mileage allowance.

If his salary was £2,000 per month, and he drove 200 miles in the month, he is entitled to £90- (200x45pence).

Do i just put his total pay to 2090 ,

or do i declare 2000 as being his pay, but on his payslip show £2090

or is there a seperate form for me to fill in showing this payment?

Bit confused on this,

can anyone kindly give me some advice?

Thanks

Ali

 

[elaine@cheapaccounting]

It is not part of his pay.

Do you have an expense system.

If not show it on the pay slip under an heading of expenses paid but make sure that it is not included in the gross to net calc

 

[MyAccountantOnline]

Hi Ali

I'd keep it completely separate to the payroll so that its not confused as pay and no PAYE/NIC is paid on it in error.

Why not use this as an opportunity to get a good system in place for paying employee expenses. It doesn't have to be anything grand just a basic system - maybe get a standard expense claim form made up in Excel. If you search on Google you'll find a few you can use as basis for your own. Make sure you ask employees to provide receipts too so that any VAT which can be claimed is recovered.

 

[elaine@cheapaccounting]

A good payroll system should allow expense processing with being part of gross to net calc. It then saves on admin & accounting - one payment to employee / month instead of two

 

[Ali123]

Hi thanks for the replies

If i wanted to show the MAP in the payslip, do i show the total amount under gross, and than exclude the MAP in net pay?

or the other way around,
show the salary plus map in net pay,,, but exclude the MAP from the gross amount earned?

Sorry for being a pain.

Thanks

 

[MyAccountantOnline]

Hi thanks for the replies

If i wanted to show the MAP in the payslip, do i show the total amount under gross, and than exclude the MAP in net pay?

or the other way around,
show the salary plus map in net pay,,, but exclude the MAP from the gross amount earned?

Sorry for being a pain.

Thanks

If you want to do it that way does your payroll software have an option to enter other payments which arent subject to PAYE and NIC? That's really what you need.

 

[ART Accounting]

Again I'd keep it separate, why not ask the employee to submit an expense form and just process it through your system like an invoice, albeit without putting them on 30 day payment terms (they'll probably start jumping up and down at that point).

 

[Magpies_Nest]

At our company, the employee completes an expense form which is then used as an invoice. The employee has their own supplier account and it is paid at the end of the month under the normal company supplier payment procedure.

If the employee is given a reimbursement that is deemed to be a benefit (i.e., contribution towards a suit) then it goes through the payroll and is taxed and NI'd.

Hope this helps
________________________

As we are on the same subject, I have a question regarding expenses and wonder if anyone can answer this.

Our contract of employment states that the employee has the right to be reimbursed their reasonable expenses - spent in the normal, required duties.

Our company's supplier payment policy is payment at the beginning of the following month (30 days - ish)

We have a worker who is starting to shout the they won't go out on business trips if they have to wait for their money as they can't afford to put fuel in the car. He earns £19k, company car, phone and laptop supplied by the company

No agreement has been made that they can be paid earlier than month end or on demand and payments have always been paid this way since he started with the company. He hasn't told the Director about standing the car down and foolishly, another worker has lent him a fuel card to help him out.

Can the employee demand to be paid within that period (say, two weeks into the month) or is the company within their rights to make them wait until the normal supplier payments are made?

 

[patientlady]

Hi Magpies
I really dont know what the employment rules are for paying out of pocket expenses, but this person is obviously struggling to subsidise the company for such a period. Could they be given say one months advance on expenses so that they are not out of pocket. 19k is not a large salary to be covering these types of payment at all

 

[Magpies_Nest]

Hi Magpies
I really dont know what the employment rules are for paying out of pocket expenses, but this person is obviously struggling to subsidise the company for such a period. Could they be given say one months advance on expenses so that they are not out of pocket. 19k is not a large salary to be covering these types of payment at all

For the area we are in 19k is a pretty good wage. He gets a 5% bonus on the weekly profit in addition to his wages but doesn't seem to want to get that bonus to increase. The feet stamping in my opinion is unfounded as he spends no more than £70 a month and his least was less than £20 in a month on mileage! Surely that can't break the bank and it's hardly subsidisng the company. He makes excuse after excuse as to why he can't visit clients. No literature, the literature was produced. Needs this, needs that etc. Everything has been granted up to now so that he can't say 'You won't give me....' or 'I can't go because....' but, it seems he HAS found something else to moan about and makes an excuse with.

If he used his noddle, he could plan to make most or all of his visits as near to the end of the month as possible and then he would only have a week or so to wait until he got reimbursed. At least he would be going out.

Bear in mind I said he hasn't said anything to the boss about refusing to go out if he doesn't get paid on demand.

Back to the question then, can he legally demand payment on demand when he agreed to the terms at the start i.e. supplier payments being beginning of following month?