CITY OF VANCOUVER CORPORATE PROCEDURE

Transcription

1 CITY OF VANCOUVER CORPORATE PROCEDURE Auto Allowance General Procedure REFERENCE AF Auto Allowance General PROCEDURE STATEMENTS 1 Eligibility Criteria 1.1 Auto Allowance: All City employees who use their personal vehicle for City business purposes to attend locations other than where the employee normally reports are eligible, with the approval of the General Manager or designate (see Auto Allowance Authorization form), to be reimbursed at the per kilometre rate for the actual number of kilometres driven. Reimbursement will be based on reimbursement claim forms submitted by employees detailing the dates, purpose and mileage driven. Such forms require approval of the General Manager or designate. 1.2 Auto Allowance Supplement: An auto allowance supplement, to be paid in addition to the auto allowance, may be approved for specific positions where the employee s personal vehicle is regularly used for City business purposes and/or the provision of a personal vehicle is a condition of employment. The General Manager shall determine whether a position qualifies for an auto allowance supplement based on the necessity of the use of a vehicle to enable the employee to carry out his/her duties and the frequency and repetitive aspect of the required use. There are two levels of auto allowance supplement. Once the auto allowance supplement has been approved for a position, a change in staff will not require further approval. 1.3 Criteria for Determining the Level of Auto Allowance Supplement: The General Manager will make the determination of the appropriate level of auto allowance supplement payable for a particular position based on the estimated number of days the vehicle will be used and the estimated kilometres to be driven in the performance of the employee s duties. The General Manager should base a decision on the appropriate level of fixed rate supplement on both the historical usage and the nature of the job functions High-Level Auto Allowance Supplement: Positions in which the employee is routinely required to drive his or her personal vehicle on more than 80% of the available days AND the annual business kilometres driven exceeds 6,000 kilometres. Auto Allowance General Procedure Page 1 of 6

2 1.3.2 Low-Level Auto Allowance: Positions in which the employee is routinely required to drive his or her personal vehicle on more than 40% and less than 80% of the available days AND the annual business kilometres driven exceeds 2,500 kilometres. 2 Rules Governing Continuation of Payment 2.1. Auto Allowance Supplement Annual Confirmation by General Managers: In February of each year, General Managers of each Department will receive from Corporate Payroll a listing of positions and employees for whom auto allowance and auto allowance supplement has been paid in the previous year including the number of kilometres recorded. General Managers will annually confirm positions that are eligible for the auto allowance supplement and the appropriate level of the auto allowance supplement Notification of Changes: General Managers are responsible for notifying Corporate Payroll of any changes to positions eligible to receive the auto allowance supplement. A memo should be forwarded detailing any additions, changes and deletions. The memo should provide the following details: action requested (add, change or delete) effective date of request position number position title employee s name and employee number In addition, for new positions, the following is also required: number of days in a normal month that the vehicle is expected to be used an estimate of the expected total annual kilometres to be driven level of auto allowance supplement approved, if applicable cost centre to be charged Continuation of Auto Allowance Supplement: The flat rate auto allowance supplement will be continued during: periods of vacation, supplementary vacation and paid compensating time-off, although it will not be paid when employees are running out accumulated paid time-off immediately prior to retirement. Auto Allowance General Procedure Page 2 of 6

3 3 Income Tax Treatment absences on sick leave and/or worker s compensation for a maximum period of one (1) months following the commencement of the illness and/or injury. the first month of any special arrangement, acting capacity or temporary promotion but not upon regular promotion to a position not requiring the use of a personal vehicle as a condition of employment. 3.1 Auto Allowances: The auto allowance rates are set in accordance with the CCRA approved rates listed in Regulation 7306 of the Income Tax Act as a reasonable allowance for the business use of an employee s personal vehicle. If an employee is in receipt of the auto allowance only, it will not be reported as taxable earnings subject to income tax and other statutory deductions. If the auto allowance is received with the auto allowance supplement, CCRA policy is to treat the total amount as a taxable allowance. 3.2 Auto Allowance Supplement: CCRA policy stipulates that if an employee is in receipt of a flat rate auto allowance in addition to the auto allowance, the total amount of the reimbursement must be treated as a taxable benefit subject to income tax and statutory deductions. 3.3 Employment Expense Deduction: Employees who receive a taxable auto allowance may be able to deduct motor vehicle expenses as employment expenses from taxable income on their personal income tax return. The general conditions for claiming expenses include: employee ordinarily required to carry on duties of employment away from the employer s place of business or in different places. employee did not receive a tax free allowance with respect to the motor vehicle expenses employee was not reimbursed for the motor vehicle expenses employee required under the employment contract to pay the motor vehicle expenses, and employee has been provided with Form T2200 Declaration of Conditions of Employment certified by the employer. If an automobile is used for both employment and personal purposes, travel expenses are prorated based on what proportion of the total distance traveled occurs in the course of employment. A log for recording business and personal kilometres will be necessary to support a claim for expenses. Employees will be responsible for maintaining adequate documentation of mileage and expenses to support their claims. Personal mileage includes travel to and from the employee s residence to the place the employee normally reports to for work. Even if the employee reports to a work site Auto Allowance General Procedure Page 3 of 6

4 other than the normal work place, CCRA may require the employee to account for an equivalent mileage as personal use. 3.4 Provision of the T2200 Form: The General Manager is authorized to complete and sign the Form T2200 certifying conditions of employment. 4 Auto Allowance Rates 4.1 Authority to Set Rates: The, with the concurrence of the City Manager, shall establish the auto allowance and auto allowance supplement. The rates will be effective January Calculation of Rates Auto Allowance: The auto allowance rate will be set in accordance with the rates published in Regulation 7306 of the Income Tax Act. The Regulation establishes per kilometre rates considered by CCRA to be reasonable allowances for the business use of an employee s automobile. Revisions are published annually be the CCRA. Two rates are established, one for the first 5,000 kilometres driven and a second for 5,000 or more kilometres Auto Allowance Supplement: The auto allowance supplements will be adjusted based on the estimated average annual vehicle operating and ownership costs, taking into consideration the auto allowance rate paid by the City. 5 Employee s Responsibilities 5.1 Payment of Vehicle Expenses: An employee who gets reimbursed by the City for auto expenses will be responsible for all expenses incurred in the operation of their vehicle. These expenses include the provision of appropriate insurance in accordance with this policy, loan or lease/rental payments, vehicle levies, gasoline, traffic fines or tickets, vehicle maintenance costs and other vehicle expenditures with the exception of parking fees, ferry costs and road tolls incurred on behalf of the City. 5.2 Vehicle Insurance Requirements: It is the employee s responsibility to provide adequate automobile insurance coverage as follows: Public Liability (All): Employees who use their personal vehicle for City business purposes must carry a minimum $1,000,000 insurance coverage for passenger hazard and public liability Business Insurance (All): In accordance with ICBC guidelines, employees who use their vehicle in excess of six days in any month and for more than 1,600 kilometres in a year on City business must carry business insurance coverage. Employees who use their vehicle Auto Allowance General Procedure Page 4 of 6

5 more than six days in a month, but less than 1,600 kilometers in the year on City business, must carry to and from work coverage Vehicle Replacement Insurance (applies to employees receiving Auto Allowance Supplement). Employees who receive the auto allowance supplement or monthly auto allowance must obtain vehicle replacement insurance that provides for a replacement vehicle should the insured vehicle become unavailable as a result of an accident. 5.3 Accurate Recording of Trips: Employees receiving the auto allowance are expected to accurately report their daily odometer readings and exclude any personal use during the day. A brief explanation of the nature of the business travel is also required. See the reverse side of the mileage report form (PR22) for further details. 5.4 Timely Completion of Mileage Reports: Employees who receive the auto allowance supplement should submit completed mileage reports to their supervisor at the end of each month. Employees who do not receive the auto allowance supplement should submit a completed mileage report at least every three months. However, employees should ensure that all mileage driven in a calendar year is reported such that the auto allowance is included in the final pay period of that calendar year. 6. Schedule of Current Rates effective January 1, 2018 Auto Allowance First 5,000 business kilometers during calendar year For each additional business kilometer during calendar year $0.55 per kilometer $0.49 per kilometer Auto Allowance Supplement Lower rate of auto allowance supplement Higher rate of auto allowance supplement $ per month $ per pay period $ per month $ per pay period RELATED POLICIES AF Auto Allowance Flat-Rate REFERENCE Auto Allowance Authorization Auto Allowance General Procedure Page 5 of 6

6 APPROVAL HISTORY ISSUED BY: City Council APPROVED BY: City Council DATE: 1978/12/12 Financial Services Financial Services APPROVED BY: City Council DATE: 2002/03/05 APPROVED BY: City Manager DATE: 2005/03/05 APPROVED BY: City Manager DATE: 2006/01/10 APPROVED BY: City Manager DATE: 2008/02/05 APPROVED BY: City Manager DATE: 2011/01/27 APPROVED BY: City Manager DATE: 2012/02/08 APPROVED BY: City Manager DATE: 2013/02/25 APPROVED BY: City Manager DATE: 2015/07/07 APPROVED BY: APPROVED BY: DATE: 2016/01/25 DATE: 2018/01/02 Auto Allowance General Procedure Page 6 of 6