How do I calculate a car allowance for employees?
I’m trying to figure out my company budget, but I don’t know what to give my employees to cover car maintenance. What steps should I take to calculate a car allowance for employees?
Budgeting can be a tricky task! To calculate a car allowance for your employees, you should research all the expenses involved with owning a vehicle, like monthly payments, insurance, fuel, and repairs. Here are some of the main expenses you should consider:
- Monthly car payments. On average, people pay between $300-$500 per month on their car loan payments.
- Insurance costs. The average car insurance cost in 2021 ranges from around $147 to $200 a month, depending on the car, location, and provider.
- Fuel and mileage costs. Your budget for gas should depend on the average distance employees drive to get to work.
- Maintenance and repair costs. Have your employees report the average annual cost of repairs for their vehicles and double-check their information. Then, you can account for the cost of their car maintenance,
Add up all the figures you’ve calculated to determine the car allowance for your employees! If you’d like to help your employees and company save some money, use Jerry to help your office find lower insurance rates!
A licensed broker, the Jerry app helps users save an average of $879 a year on car insurance. Just answer a handful of questions that will take you roughly 45 seconds to complete, and you’ll immediately get car insurance quotes for coverage similar to your current plan!
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