Car Perks Unused During Work From Home: Should We Deduct or Tax Them? Seeking Advice

Hi all, this is regarding the car hire payments, which are one way to provide salary deduction benefits to employees by the company. My question is: in this pandemic situation, most employees are working from home, and car perks are not being used. Do we need to deduct this amount from their salary, or is it included in their salary as a taxable part? Seeking your valuable inputs.

Understanding Employee Benefits and Allowances

Sandeep, a benefit or allowance is always tied back to a purpose that employees might avail of at will, or it can be imposed on them by HR Payroll Policies.

In your case, the allowance or benefit for car payments may be withdrawn for the period strictly from the date of declaration of lockdown to the date of resumption of normal business operations. Please do not deduct any further unjust amount for an unjust period, as this might lead to a lack of trust in Company Management.

However, this benefit should continue for those related to essential operations in your company like Housekeeping, HR, IT, Admin, etc., who are braving the situation and somehow managing to come to the office.

Car hire perks during the pandemic

Thanks, P. Lekha Jacobs. I need inputs from other professionals as well.

Car hire was not availed by the employees in this pandemic situation. What would be the treatment of car hire perks?

Car Hire Reimbursement During WFH

If the car hire facility is not used by your employees due to WFH because of the Covid-19 pandemic, you need not reimburse the amount meant for car hire.

Considerations for Car Allowance During Remote Work

This is an occasion when the organization has to show solidarity with the staff. Though you can deduct the car allowance, we need to ascertain whether it was paid purely towards travel expenses or as part of the gross remuneration. If that amount is withdrawn, are you paying any other allowance for WFH, such as furniture, internet, electricity, extra time, etc.? Let us be considerate to the staff, especially during such an uncertain situation.