Currently, my company is going through major changes. At present, we provide fleet cars to managers, and all other staff pay for their parking at the external multistory parking lot managed by a hospital. However, due to these major changes, parking permits have been withdrawn from the staff because the hospital needs more parking for their customers.
Our business is a not-for-profit organization focusing on disabilities. We have speech therapists and community allied therapists who go for off-site appointments regularly. Some appointments are far from our workplace, and sometimes they are closer to the staff's residential area. However, because we have a fleet, the staff is required to come to work and take the fleet car to the appointment. Only in special cases are staff allowed to use their car for such appointments, and then they are reimbursed on a per kilometer basis subject to service manager approval.
The issues with using a fleet car include early appointments, such as at 7:30 am, when managers come to work at 8 am. Sometimes the booked fleet car is double-booked or not returned in time for a second person to use it. This results in a lot of time wastage and could potentially reduce the number of appointments we could take to generate extra income for the business.
Our future plan is to become mobile and conduct off-site appointments so that staff do not necessarily have to come to work physically but can still work remotely. Additionally, if we decide to compensate staff for their vehicle use, we need to determine the best way to utilize our fleet; otherwise, they would remain unused.
I am currently evaluating the pros and cons of compensating staff on a per kilometer basis versus providing them with a travel allowance. It's worth noting that if we do compensate staff, we can offer $0.66 per kilometer as regulated by the Australian Tax Office, and this expense provides a tax benefit for our business. Any ideas on this matter would be helpful as I am considering a Cost vs. Benefit approach to address this issue.
Your advice and tips would be greatly appreciated.
Thank you.
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1Our business is a not-for-profit organization focusing on disabilities. We have speech therapists and community allied therapists who go for off-site appointments regularly. Some appointments are far from our workplace, and sometimes they are closer to the staff's residential area. However, because we have a fleet, the staff is required to come to work and take the fleet car to the appointment. Only in special cases are staff allowed to use their car for such appointments, and then they are reimbursed on a per kilometer basis subject to service manager approval.
The issues with using a fleet car include early appointments, such as at 7:30 am, when managers come to work at 8 am. Sometimes the booked fleet car is double-booked or not returned in time for a second person to use it. This results in a lot of time wastage and could potentially reduce the number of appointments we could take to generate extra income for the business.
Our future plan is to become mobile and conduct off-site appointments so that staff do not necessarily have to come to work physically but can still work remotely. Additionally, if we decide to compensate staff for their vehicle use, we need to determine the best way to utilize our fleet; otherwise, they would remain unused.
I am currently evaluating the pros and cons of compensating staff on a per kilometer basis versus providing them with a travel allowance. It's worth noting that if we do compensate staff, we can offer $0.66 per kilometer as regulated by the Australian Tax Office, and this expense provides a tax benefit for our business. Any ideas on this matter would be helpful as I am considering a Cost vs. Benefit approach to address this issue.
Your advice and tips would be greatly appreciated.
Thank you.
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From the details you've provided, it seems like you're faced with a significant decision that could impact both your staff and your organization's operations. Here's a detailed analysis of your options, taking into account the pros and cons:
Option 1: Continue with the Fleet Cars
👍 Pros:
- Fleet cars are already available and won't incur additional costs.
- Ensures consistency and control over vehicle maintenance and safety.
👎 Cons:
- Early morning or back-to-back appointments can lead to scheduling conflicts and inefficiency.
- Unused fleet cars can become a liability.
Option 2: Compensate Staff on a Per Mile Basis
👍 Pros:
- Could increase staff satisfaction and flexibility.
- No need for staff to physically come to work before off-site appointments, increasing efficiency.
- May lead to tax benefits as per the Australian Tax Office.
👎 Cons:
- Costs could be unpredictable and potentially higher, depending on how much staff travel.
- Less control over vehicle maintenance and safety.
Option 3: Provide a Travel Allowance
👍 Pros:
- Could provide a more predictable cost structure.
- Staff can use the funds as needed, providing them with flexibility.
👎 Cons:
- Less control over how funds are used.
- Potentially less tax beneficial than mileage reimbursement.
Considering your future plans to go mobile and the issues with the current fleet car system, either compensating staff per mile or providing a travel allowance might be worth exploring further.
To decide between these two, you could:
1. Estimate the cost for both options: For the per mile compensation, consider the average distance your staff need to travel for off-site appointments. For the travel allowance, you'd need to determine a fair amount per staff member.
2. Evaluate the potential tax benefits of the per mile compensation. If this is significantly higher, it could offset higher costs associated with this option.
3. Consider staff feedback: It might be useful to get input from your staff on which option they would prefer, as this could impact job satisfaction and retention.
As for the unused fleet cars, here are a few suggestions:
- Cars could be sold to recover costs.
- Cars could be leased out to generate additional income.
- Cars could be kept for staff who don't have their own vehicle or for special company events or needs.
I hope this analysis helps guide your decision-making process. Remember, the best solution is one that balances the needs of your staff, the operational efficiency of your organization, and the financial implications of each option.
From India, Gurugram
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Option 1: Continue with the Fleet Cars
👍 Pros:
- Fleet cars are already available and won't incur additional costs.
- Ensures consistency and control over vehicle maintenance and safety.
👎 Cons:
- Early morning or back-to-back appointments can lead to scheduling conflicts and inefficiency.
- Unused fleet cars can become a liability.
Option 2: Compensate Staff on a Per Mile Basis
👍 Pros:
- Could increase staff satisfaction and flexibility.
- No need for staff to physically come to work before off-site appointments, increasing efficiency.
- May lead to tax benefits as per the Australian Tax Office.
👎 Cons:
- Costs could be unpredictable and potentially higher, depending on how much staff travel.
- Less control over vehicle maintenance and safety.
Option 3: Provide a Travel Allowance
👍 Pros:
- Could provide a more predictable cost structure.
- Staff can use the funds as needed, providing them with flexibility.
👎 Cons:
- Less control over how funds are used.
- Potentially less tax beneficial than mileage reimbursement.
Considering your future plans to go mobile and the issues with the current fleet car system, either compensating staff per mile or providing a travel allowance might be worth exploring further.
To decide between these two, you could:
1. Estimate the cost for both options: For the per mile compensation, consider the average distance your staff need to travel for off-site appointments. For the travel allowance, you'd need to determine a fair amount per staff member.
2. Evaluate the potential tax benefits of the per mile compensation. If this is significantly higher, it could offset higher costs associated with this option.
3. Consider staff feedback: It might be useful to get input from your staff on which option they would prefer, as this could impact job satisfaction and retention.
As for the unused fleet cars, here are a few suggestions:
- Cars could be sold to recover costs.
- Cars could be leased out to generate additional income.
- Cars could be kept for staff who don't have their own vehicle or for special company events or needs.
I hope this analysis helps guide your decision-making process. Remember, the best solution is one that balances the needs of your staff, the operational efficiency of your organization, and the financial implications of each option.
From India, Gurugram
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Expense and Travel Reimbursement-I SG.doc