TAX AUDIT SLAMS DRIVERS
With all the current noise about the travel allowance being reduced. Those who understand the scam know full well how it can backfire on the driver.
The boss pays 45 cents per km, 1.75 cents above the award, but that includes the travel allowance of $95 per night away. This reduces the gross taxable wage before PAYG is applied. So really the driver is being paid less than the award to start with.
Then the Australian Taxation Office (ATO) rocks up to the party and asks for “evidence” of how the $95 was spent. Sorry ATO, yes I claimed $95, but I can only produce $45 in receipts per night. Boom! A tax fine and a potential tax bill.
So the outcome is, underpayment of wages as per the award (clause 13.3(d) breach), underfunding of the drivers PAYG, and a potential tax penalty from the ATO.
FYI: clause 13.3(d) says “travel allowance must be paid in addition to the minimum km rate”.
Now who thinks this is still a good idea?
The reduction to $55 stops the boss from creating a potential problem with the ATO and $55 is easily expensed with receipts as evidence. And $55 per night means your real km rate is higher than previous.
You can still claim the $95 per day if you wish, if you have receipts.
We have drivers in our group who are fighting $7000 per year tax bills. The Drivers Advocate, Qld (Name withheld by request)