From 1 July 2015, car expense deductions for individuals were simplified. If you have clients who pay their employees a car allowance, remind them they need to withhold tax on the amount they pay over 66c per kilometre.
If they haven’t been doing this, they should start now to avoid their employees having a tax debt.
If your clients have paid a car allowance at a higher rate, they should discuss if their employees want them to increase the withholding amount for the remainder of the financial year to cover the shortfall.
[ATO website] [LTN 10, 18/1/16]
If the allowance is paid for particular claimed kilometres, at a rate lower than $0.66/k, then there will be withholding after 5,000km has been reached. If the allowance is paid at above the $0.66 rate, then withholding starts above $3,300 (irrespective of the number of kilometres claimed).
It is less clear what should happen if the allowance is not paid on a per kilometre basis.