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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 can be a daunting proposition. Mobile workers incur a wide range of expenses as they drive, from fuel and maintenance costs to depreciation and insurance premiums. Tracking, processing, and reimbursing these costs accurately can create substantial challenges for any organization, and so many oer a standard rate, or "Flat Car Allowance," to pay for all expenses ($500 a month per employee, for example, used across the organization). These at car allowances save the time of calculating reimbursement amounts for each worker based on all the variables involved in business travel–and cost both employers and employees thousands of dollars each year. Flat allowances have been shown to greatly increase expenses through tax waste, cost inequities, decreased employee productivity, and more. As technology improves to meet the needs of the modern mobile workforce, using a at car allowance has become an antiquated, and very costly, option for vehicle reimbursement.

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