One-Stop HR Information Centre

In Malaysia, most companies will provide company cars / car allowance as part of the remuneration package for their senior managers, or as a tool to retain their key talent. Whether a company car or a car allowance is provided, it depends on the Company’s policy, budget, total number of eligible employees, etc.

As a guide to work out a Company Car / Car Allowance policy, the following terms shall be covered:

General

• This benefit is given subject to the job grades and the nature of job of the employees, with the approval of the <first level approval, could be Head, HR department) and <second level approval> (if any, to avoid dispute).
• This benefit is non-contractual and may be reviewed from time to time or withdrawn at the discretion of the Management.

Company Car

• Directors of Holding Companies shall be entitled to a company car, according to the following eligibility. <Spell out the categories of directors and their eligibility, usually by purchase value of cars>.
• The types of car shall be determined by the Management.
• All running expenses of the company car shall be borne by the Company, including insurance, road tax, petrol, maintenance, etc.
• The Management reserves the right to replace the company car every <number of> years or more, or at anytime the Management deems necessary.
• The purchase, maintenance and administration of the company cars shall be handled by <department>, (usually administration department of the Company).

Car Allowance

• Directors of Subsidiary Companies with grades <grade>, and eligible employees with job grades <grade> shall be entitled to the a car allowance according to their job grades. <Spell out the entitlement, e.g. RM4,000 per month for grade D1>.
• Notwithstanding the above term, the Management reserves the right to provide an employee with a company car, instead of car allowance, depending on their nature of work, or any other reasons. If an employee opts for company car instead of car allowance, it is subject to the Management’s approval.
• The car allowance shall cover car installments, annual insurance and road tax, maintenance expenses and other related expenses incurred from domestic business travel.
• For the employees who are eligible for car allowance, they shall replace their car at least every <number of> years from the date of car registration. Otherwise, the Management reserves the right to review the car allowance, to make sure the amount commensurate with the expenses of the particular vehicle used by the employees of the particular time.
• If an employee is promoted, his / her car allowance eligibility will not be automatically upgraded, unless separate notification is given.
• The employees should update the Company immediately on their vehicles’ information if there is any changes.