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Flat-Out Wrong: The Costs of Flat Car Allowances

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FLAT-OUT WRONG: THE COSTS OF FLAT CAR ALLOWANCES Reimbursing employees who drive personal vehicles for business may seem like a big change. From fuel and maintenance costs to deprecia on and insurance premiums, mobile workers incur a wide range of expenses as they drive. Tracking, processing and reimbursing these costs accurately can create substan al challenges for any organiza on. Many businesses offer a standard rate, or "Flat Car Allowance," to pay for all expenses instead. For example, an organiza on may provide $500 a month per employee. These flat car allowances save the me of calcula ng reimbursement amounts for each worker. They also cost both employers and employees thousands of dollars each year. Flat allowances have been shown to greatly increase expenses through tax waste, cost inequi es, decreased employee produc vity and more. As technology improves to meet the needs of the anywhere workforce, using a flat car allowance has become an an quated, and very costly, compensa on op on.

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