<prompt> Human: My husbands company is providing company cars in a few months. Their pay system is changing because of it, and he will now get 100month deducted from his paychecks to offset the tax benefit. Were not really understanding how this works, and what it means. Could someone please explain what this means in simple terms?This is what the company car policy states:The IRSCRA regulations state that the use of a company vehicle for personal use including fuel considered taxable income and must be included on the associates W-2T4 form as taxable income. A personal use charge of 100.00month prorated as necessary will be automatically deducted through payroll according to the regular pay frequency of the associates base salary to offset the taxable income. The total taxable benefit calculation includes fair market value of the vehicle, business and personal miles driven, IRSCRA lease value of the vehicle, and IRSCRA value of the fuel used for personal use based on number of personal miles driven, value of insurance, tolls incurred, and the rental taxable benefit if applicable. The total taxable benefit is then subtracted from the total personal use payroll deductions. The balance is the additional income that the associate is taxed on. If the total personal use charge withheld is less than the taxable benefit calculated, the difference will be added to the associates W-2 as added income. If the associate pays more through the personal use charge than what the taxable benefit is, the associate will not receive a refund and will not be taxed on any additional income.Im just not really understanding the whole concept, and what it means to have money taken out of the paychecks to offset the tax benefit.  <response>: So, youre taxed when you have a company car as it and its use are considered income. They outline above how thats calculated.Where it gets tricky is when you use the car for personal purposes. Thats why theyre withholding the 100. Think of it this way - theyre covering the tax of the vehicle for business use its value, the gas, tolls, etc; but, are anticipating youll pay for personal tax liability you take their car for two miles down the street, it has a value and its taxedUnfortunately, they dont know what your personal use is until you use it. Its a tax benefit to you that they withhold the money so youre not spending after tax dollars to catch up. 