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The Cost of Vehicle Programs: What Operations Leaders Need to Know

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There's an opportunity for Operations leaders to find efficiencies for the business and their mobile employees with the vehicle program they choose to administer. There's a number of different options available that offer unique benefits and challenges for your company. Selecting the right vehicle program will help you improve operational efficiency and increase the productivity of your mobile workforce. To keep it simple, companies use flat car allowances (for example, $300 a month per employee), which resolves the problem of complex expense calculations. However, flat allowances ignore variances in the fixed costs of driving, such as car insurance premiums and property taxes (both of which can fluctuate considerably by location). Flat allowance program Flat allowances are also subject to both Federal Insurance Contributions Act (FICA) taxes for employers and income taxes for employees. Because of this, providing a flat allowance of $300 costs an organization $322 after taxes, while employees take home only $225. The costs of this "simple" solution quickly outweigh its convenience. It's important to understand the cost and benefits of each vehicle program to find the right fit for your business. Here's everything Operations leaders need to know about vehicle programs: ! The Cost of Vehicle Programs: What Operations Leaders Need to Know The Cost of Vehicle Programs: What Operations Leaders Need to Know

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