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Accounting, Payroll & Pension Issues/Auto Allowance eligible for 401k contributions?

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Expert: - 10/4/2010


Question
Several employees receive a biweekly auto allowance that is paid to them through payroll along with their regular wages. It is to help with gas, wear and tear, ect for the use of the personal vehicles for business purposes. Is this earning eligible for 401k deductions? Thank you!

Answer
Whether or not this is eligible for 401K  deductions depends on how your company has set up it's 401K plan and it's payroll system. When the plan is set up in the system the HR or Payroll employee must designate which wages are eligible and which ones are not.

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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