AA Rates and Costs

[Cloud]

I recently undertook a trip in my own personal vehicle for our company.

The boss told me to charge it at "AA Rates"

Well, it was a 580km journey undertaken in one day.

The car is a 2007 model that does less than 10 000km a year, its a 1400.

Now, according to the AA calculator on their site, I should get R4.48 or so back per kilo, which seems excessive to me.

Then I read some more and picked up that the max you can charge per kilo is R2.9 after which you have to pay income tax on it.

My car is fairly new, I hardly drive anywhere far, so I would like to get the right amount for this journey, but also do not want to go over the top as our company is going through some changes and access to funds could be limited.

Any advice?

[Goobie]

See what it would have cost if you had rented a car from Budget rent a car vs the AA rate, do the calculations with regard to free included kms and fuel cost and use the cheaper of the two. That way you can argue with the company that you are still saving them money as it would have been more expensive to rent a car.

[quovadis]

The AA rates are based on total cost of the maintenance etc for the vehicle so its fair. It takes into account everything from tyre wear to fuel/oil/maintenance etc.

[Cloud]

Just sounds rough, since the fuel costs was only about R320 or so.

Charging the AA rate of R2.5k for the journey could be seen as me going over the top a wee bit :P

I've asked around the office and people here say something between R2.50 and R3.20 per kilometer.

I'm still confused >.<

[Budza]

Added to that is the depreciation of your (newish) car due to the km being added.

Not sure about the income tax thing. This can turn out to be a nice cash suplement if you will be doing more travelling. Don't scare your company off by charging excessively. On the other hand, it's cheaper for them than renting you a car...

[Albereth]

If that's the AA rate, that's what it is. And don't think that it is a nice cash supplement - your car is picking up mileage. The only benefit is from a slight cash up front angle - you'll be paying for a service quicker than you would have normally.

The tax impact is usually an offset against your car allowance - assuming that you have one. But from a tax persepective you have not gained in anyway - you have been reimbursed for an expense by the company to a situation where you are at zero gain/loss. The amount is tracked because some people have an allowance that reduces their taxable earnings and they need proof of use of the allowance in order to settle the tax books.

[quik]

We often travel for clients and I also charge AA rates. If the employer/company is not willing to pay the rate, they should provide you with transportation.

[Old_Username]

If you're an AA member then just call them- they'll work everything out for you.

I called them a month or so ago. They'll ask for the following information when you call: 1) How kms you do a year 2) The car's engine capacity and 3) The car's purchase price.

They factor in car maintenance costs too- perhaps ask for the amount they give you to be broken down

[Cloud]

Lush

Yes, all that information is available for you once you register on that the site.

The amount came to R4.48 per kilometer. Which equates to R2598.40 for the journey.

I think I will go have a chat with my boss (when he is in a livelier mood) to see what he meant by AA rate exactly.

Thanks for the replies!

[quik]

If you're an AA member then just call them- they'll work everything out for you.

I called them a month or so ago. They'll ask for the following information when you call: 1) How kms you do a year 2) The car's engine capacity and 3) The car's purchase price.

They factor in car maintenance costs too- perhaps ask for the amount they give you to be broken down

It's not exactly rocket science to do the calculation yourself.

Lazy people... shhheeesh

[Something2say]

In your case you benefited from the AA rates calculator, That isn’t always the case. I think that there is a major flaw with the way they calculate what to pay someone. Quovadis says they include everything from tire wear to maintenance. I feel that this is untrue.

Firstly why does a company get to benefit from the amount of personal driving a person is doing? They shouldn’t include personal driving into the equation. I feel that it is unfair for the company to pay someone less per kilometre because they do more personal driving. Work and personal should be kept separate. It is unfair that an employer gets to pay an employee less per kilometre just because the employee is doing more personal driving. It’s not as if the employee is paying less for his petrol or for wear and tear on his car.

I also feel that my cars mileage shouldn’t factor into your mileage calculation either. The mileage a car has on it has nothing to do with the cost of petrol so why should the employee be paid less per kilometre that they drive because there car has higher mileage? Older vehicles require more maintenance and therefore people with older vehicles are already paying more for maintenance then people with newer cars and now they getting paid less per kilometre the drive as well.

I feel that there should be a set rate per kilometre driven. You shouldn’t get paid less towards petrol because a company is making you drive further distances. Petrol doesn’t cost less because you driving a further distance so why should a company get to pay their employees less because they are making them drive further distances for work?

So in my opinion the AA rates calculation is Flawed.

[Budza]

Yoh.