Gross Salary Vs Allowances

[Alkers86]

My OH has negotiated a raise after a promotion at work.

HR have approached her and offered her three options:
Gross salary +10k
Gross salary +5k + car allowance of 5k
Car allowance of 10k

I'm assuming that any car allowance would be taxable as per any income so cannot see why we would choose this option? Her work pays 5% of her gross salary as a pension contribution so assumedly the best option is just the gross salary +10k or am I missing something?

 

[misemoi]

Car allowance might not be a pensionable payment or included in any potential severance down the line, and it might not be considered for future raises or merit increases. I would go with the 10k in this case. Why did they even offer a choice??

 

[Coldwarrior]

Car allowance might not be a pensionable payment or included in any potential severance down the line, and it might not be considered for future raises or merit increases. I would go with the 10k in this case. Why did they even offer a choice??

Agreed, car allowance may also not be counted in yearly bonus calculations, which are usually a percentage of the gross salary. Could also potentially reduce the amount you could borrow when applying for a mortgage, though I think currently most banks treat car allowance the same as gross salary in their calculations.

Strange they offered a choice, it may make some sense if they were offering a higher amount via the car allowance but when all the values are 10k it seems odd.