Published 23 October 2026, Synergy Audit
Court clarifies when an allowance for travelling work is subject to personal income tax and insurance contributions
A company paid its drivers an allowance for the travelling nature of their work without withholding personal income tax or charging insurance contributions.
The dispute
The tax authority treated the payments as part of salary. The court sided with the tax authority.
Why the payments were treated as salary
- the payments were made systematically;
- the amount of the allowance depended on mileage and time on the road;
- the employees did not confirm the expenses they had actually incurred.
Conclusion
If an allowance is in substance additional remuneration for work rather than reimbursement of expenses incurred, there is a risk that personal income tax and insurance contributions will be assessed.
Resolution of the Arbitrazh Court of the Volga-Vyatka District dated 3 September 2026 in case No. A43-19572/2025
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