As part of Government’s recent cost cutting measures, the Department of Finance and Revenue have announced a 25% reduction in the mileage and subsistence rates that can be paid to employees on a tax-free basis.
The new rates, which take effect from 5 March 2009, apply to employees who use their private car (or motorcycle) for business purposes in the normal course of their duties and bear all the motoring expenses. Subsistence payments are payments intended to covers employees’ subsistence expenses during absence from his/her place of employment for a certain period of time. The new rates are as follows:
Rates per kilometre: –
| Official Motor Travel in a calendar year | Engine Capacity up to 1,200cc | Engine Capacity 1,201cc to 1,500cc | Engine Capacity 1,501cc and over |
| Up to 6,437km | €39.12 | €46.25 | €59.07 |
| 6,438km and over | €21.22 | €23.62 | €28.46 |
Domestic Subsistence Rates: –
| Overnight Rates | Day Rates | ||||
| Normal Rate | Reduced Rate | Detention Rate | 10 hours or more | More than 5 hours but less than 10 hours |
|
| A Class | €108.99 | €100.48 | €54.48 | €33.61 | €13.71 |
| B Class | €107.69 | €92.11 | €53.87 | €33.61 | €13.71 |
A Class: Salaries of €67,960 and above
B Class: Salaries below €67,960
Employers should take note of the new changes as payment in excess of these rates is subject to PAYE and PRSI and the employer is obliged to deduct PAYE and PRSI at source. Although employers are not obliged to use these rates, any payment in excess of these rates is subject to PAYE and PRSI.
