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Hi there,
Could you please tell me how I can calculate the rate/km an employee should receive for using their own vehicle for work purposes?
This person is already paid an hourly wage, in addition we will pay them per km driven from/to client locations. The car is a 1999 Mitsubishi Legnum. The IRD suggests .77/km but that seems like a high rate for this vehicle.
I look forward to any assistance you can provide.
Thanks! :)

While the IRD rate of 77c per km is high for an old car, the IRD don't differentiate between age, size, value or engine capacity of the vehicle.
The AA produces running cost reports annually, which can be purchased for $20 for AA members or $25 for non-members, however, these are calculated on vehicles at 3 to 5 years of age, where depreciation is a major part of the running cost. On an older car, the depreciation has deminished, but there could be unforseen mechanical failure, so there is no firm rate for an older car.
But the over-riding factor is that there is no hard and fast rate when it comes to negotiations between employers and employees, and most just negotiate a fair rate. In reality, a rate of around 50c per km is probably about a fair rate for a vehicle such as this.

Thanks for your reply, this was very helpful. :)
Cheers!