Company car

In Profit Payroll you can process the private use of a car in the wages.

Description

As from 2006, the value of the private use of the car is added to employee's wage, if the employee drives more than 500 kilometres for private purposes. On this addition the employee pays wage tax and 'ZVW' premium (so no 'SV' premiums). However, there are conditions attached to this. For more information, please refer to the tax authority's website.

The fiscal addition percentage is variable (it depends on the car's energy label). You set this for the employee in the car's properties.

Note:

If you are using the multiple employments functionality, Profit Payroll only processes the car in the wage for the main employment. You cannot link a car to an additional employment.

Wage components:

In Profit Payroll, the following wage components are relevant with regard to a company car:

The default percentages for the addition are minimum percentages. As from 2010: if the actual usage is higher than 25%, you must enter the part exceeding 25% as the addition.

Example:

For 2010 the following applies:

The default addition for a particular car is 14%.

The private use of this car is, however, 30%. This means a 5% surplus compared to the default percentage (= 30% - 25%).

So the percentage will be 14% + 5% = 19%.

Weighted period calculation

Profit automatically applies the ‘weighted calculation based on calendar days' when determining the fiscal addition, the own contribution for private use and the own other contribution.

The fiscal addition percentage is variable (it depends on the car's energy label). Suppose, for example, that an employee first has a car with a low addition percentage and then later has one with a high addition percentage. When calculating the addition, Profit takes this into account using the weighted calculation.

Fiscal addition period amount = (Number of calendar days for car / Number of calendar day for period * addition % * catalogue value) / number of periods per year.

Example:

An employee has been employed throughout April 2009. The month of April has 30 calendar days and you process the employee's wage per month. On 11 April he receives a car with a value of € 30,000 and a 25% addition percentage.

Fiscal addition for April: (20/30 * 25% * 30,000) / 12= 416.67.

As from May the complete addition will be calculated for every month: (25% * 30,000) / 12 = 625.00.

Even if an employee changes cars and addition percentages during a period, Profit will still calculate the correct fiscal addition.

Example:

An employee has been employed throughout April 2009. The month of April has 30 calendar days and you process the employee's wage per month.

• Car 1: On 10 April he receives a car with a value of € 30,000 and a 25% addition percentage.

  He uses this car for 10 days.

• Car 2: On 20 April he receives a car with a value of € 20,000 and a 14% addition percentage.

  There are 11 days left in April.

Fiscal addition for April:

• Addition for Car 1: (10/30 * 25% * 30,000) / 12= 208.33.
• Addition for Car 2:  (11/30 * 14% * 20,000) / 12= 85.55.

As from May, Profit will calculate the complete addition for Car 2 each month.

Even if the employee leaves employment during a period, Profit still calculates the fiscal addition, the own contribution for private use and the own other contribution correctly.

Employee has more than one car

Based on a tax authority ruling, the situations described below should be dealt with as follows, (situations 2 and 3 are particularly important):

The current specifications (and those for 2012) are not explicitly configured for a situation of an employee having more than one car. The specifications are expected to be revised for the year 2013 to allow you to specify the exact details for each of the cars. Under the current specifications, you proceed as follows:

• The employee has two or more 'taxed' cars:

  For the Personal car use value and Employee's contribution for personal use of car headings, an accumulated amount for all cars is required for the wage declaration. Profit now does this automatically.

• The employee has one (or more) 'taxed' car(s) + one (or more) 'untaxed' car(s)

  You enter the data of the 'taxed ' car(s). For the 'untaxed' cars, you do not enter a No car addition reason code for the tax authority agency for the employee. It is clearly not logical for the declaration to complete both the Personal car use value heading and the Reason code of no car addition heading.

• The employee has two or more 'untaxed' cars:

  You complete the No car addition reason field for the tax authority agency at the employee level.

  The value of the Personal car use value and Employee's contribution for personal use of car headings must be € 0. This is performed automatically by Profit.

Procedure

• Record a car using Fleet

  You manage lease cars with the fleet. The fleet consists of all leased cars within your organisation. You can link every employer to the cars that are used by that employer. Next you link every employee to the leased car desired. Now you can register mileage, services and any damage.

• Process a car using the Payroll configuration of an employee

  At the employee level you post the values regarding the company car to the wage components.

• No addition or 0% addition for a company car

  If the employee has a ruling of the tax authority because annually he drives less than 500 private kilometres, or if the employee uses a van strictly for business purposes, you record this as reason for no addition at the employee level.