29Motor vehicle allowances

29 Motor vehicle allowances

(1)  For the purposes of this Act, "wages", in respect of a financial year, do not include the exempt component of a motor vehicle allowance paid or payable in respect of that year.

(2)  Accordingly, if the total motor vehicle allowance paid or payable to an employee in respect of a financial year does not exceed the exempt component, the motor vehicle allowance is not "wages" for the purposes of this Act.

(3)  If the total motor vehicle allowance paid or payable to an employee in respect of a financial year exceeds the exempt component (if any), only that amount that exceeds the exempt component of the motor vehicle allowance is included as "wages" for the purposes of this Act.

(4)  The "exempt component" of a motor vehicle allowance paid or payable in respect of a financial year is calculated in accordance with the formula –

where –

E is the exempt component;

K is the number of business kilometres travelled during the financial year;

R is the exempt rate.

(5)  The "number of business kilometres travelled during the financial year" ("K") is to be determined in accordance with the continuous recording method, or the averaging method, whichever method is selected and used by the employer in accordance with Part 5 of Schedule 1 .

(6)  The Commissioner, by order in writing, may approve the use, by an employer or class of employer, of another method of determining the number of business kilometres travelled during the financial year (including the use of an estimate). If so, the number of business kilometres travelled during the financial year is to be determined in accordance with the method approved by the Commissioner.

(7)  For the purposes of this section, the "exempt rate" for the financial year concerned is –