Overview
This article explains how to correctly configure a Car Allowance as a taxable allowance in ZonePayroll.
Car Allowance taxable behavior depends on the configuration of the Pay Component Sub Type (PCST) being used.
To ensure correct taxation, the PCST must be set up as an Allowance with the correct taxable and STP settings.
Step 1. Review Existing Pay Component Sub Type Codes
Navigate to Payroll Admin → Payroll Setup → Pay Component Sub Types
Locate existing motor vehicle-related codes such as:
Car Allowance
Motor Vehicle
These may already exist and can either be used directly or copied to create a custom version.
Step 2. Configure the Car Allowance as Taxable
Open the relevant PCST and ensure the following fields are set correctly:
| Field | Required Value |
Pay Component Type | Allowance |
Pay Component Category | Taxable Expense Payment |
Taxable Box | Ticked |
Rate | 1.0 |
STP Type Code | Must be populated |
Step 3. Configure Superannuation (OTE) Settings
If super is not payable on this allowance:
| Field | Required Value |
OTE Box | Unticked |
OTE Rate | Blank |
If super is payable, configure OTE based on business requirements.
Step 4: Apply the Correct PCST to the Employee
Once the taxable Car Allowance PCST has been configured, update the employee’s allowance setup and replace the incorrect non-taxable allowance.
✅ Notes
Existing motor vehicle PCSTs can often be reused instead of creating a new one
Always ensure the STP Type Code is populated for compliance
Taxable behavior is driven by PCST setup, not employee setup alone
Validate payroll results after configuration changes are made