I’ve been asked about a possibility of payments to the employee without social insurance contributions. Here is an explanation of the tax implications and rules regarding the use of a private car of an employee for business purposes, with a distinction between the local trips and the business trips to another municipality:
Local trips
The refunds incurred by an employee for using a private car for business purposes in local trips are exempt from ZUS. That’s the most common possibility for payments to the employee without ZUS.
The amount of these refunds is determined on the basis of:
- lump sum
or
- records of the vehicle’s mileage filled in by the employee.
The simplest option, which doesn’t require writing down each kilometer of the private car use for business purposes, is solution 1: The lump sum.
The lump sum solution requires establishing by the employer a monthly mileage limit for local …