With small business it is very common to provide a vehicle to the owner and key employees. It is often done in the construction industry and transportation sector. The idea is to provide transportation for not only the convenience of the employer but as retention tool for employees.
Employer Provided Vehicle
Employer provided vehicle requires multiple compliance steps for the company. When an employer is provided a vehicle, the employee must track mileage for both the employer and personal use. The company allocates total vehicle costs between the employee and the company. The company must report the employee’s share of the provided vehicle as additional wages and pay the appropriate employer taxes.