How is car allowance taxed on salary?
Your car allowance is paid out with your salary and it is taxed at the same rate as your monthly income. Although a car allowance is generally a great benefit, one thing to consider is how much tax you will be paying if you do receive it, as it can push you into a higher tax bracket. Can I receive mileage allowance while receiving a car allowance?
How bad is a car allowance compared to the rest?
A car allowance will be slightly worse than the rest of your salary in every respect. Once upon a time companies would hand out company cars. Then it got complicated and taxy, so they handed out car allowances as replacements.
Can my employer pay for my car allowance if I lease?
Regardless of the car you drive - as long as it’s not a company car - your employer can choose to pay a car allowance as a company benefit. It does not matter whether you buy, already own or lease the vehicle, the allowance is the same.