The formula to calculate the Fair Car Allowance (FCA) is:
\[ FCA = M \times 0.656 \]
Where:
Fair Car Allowance is the amount of money reimbursed to an employee for using their personal vehicle for business purposes. It is calculated based on the miles driven and a predetermined rate per mile. This ensures that employees are fairly compensated for the wear and tear, fuel, and other expenses incurred while driving for work.
Consider an example where:
Using the formula to calculate the Fair Car Allowance:
\[ FCA = 500 \times 0.656 = 328 \text{ \$/mile} \]
This means that the fair car allowance for this example is $328.
