A car fringe benefit most commonly arises where you make a car you 'hold' available for the private use of an employee.
You can calculate the taxable value of a car fringe benefit using either the statutory formula method or operating cost method.
When you complete the information at item A, do not show the actual value of the cars in the 'Gross taxable value (a)' column.
Employee contributions include:
- amounts the employee pays directly to you for using a car
- any car operating costs (for example, fuel) the employee paid.
Use GST-inclusive amounts where appropriate.
If, at the beginning of the FBT year, you have already owned or leased the car for four years, you can reduce its base value by one-third. The reduction applies only once for a particular car – you then use the reduced base value for subsequent years
Determining the statutory percentage
You can reduce the base value of a car by one-third for the year ending 31 March 2017, if you owned or leased the car in the year ending 31 March 2012. The reduction applies only once for a particular car and you then use the reduced base value for subsequent years.
A flat statutory rate of 20% applies, regardless of the distance travelled, to all car fringe benefits you provide from 1 April 2014 (except where there is a pre-existing commitment in place before 7.30pm AEST on 10 May 2011 to provide a car).
Pre-existing commitment in place before 7.30pm AEST on 10 May 2011
The statutory percentages for car fringe benefits provided where you have a pre-existing commitment in place before 7.30pm AEST on 10 May 2011, are as follows:
Total kilometres travelled during the FBT year |
Statutory percentage |
Less than 15,000 |
26 |
15,000 to 24,999 |
20 |
25,000 to 40,000 |
11 |
Over 40,000 |
7 |
You can continue to use these statutory rates for all pre-existing commitments unless there is a change to that commitment (for example the car is re-financed or the lease relating to the car has ended or been extended).
If a car was not held for the whole FBT year, you need to work out how many kilometres it would have travelled if you had held it for the whole year, to establish the appropriate statutory fraction, for example, if you acquire a car halfway through the FBT year and it travels 12,000 kilometres in six months, the distance it travels in a year is 24,000 kilometres.
Example 9: Taxable value of car fringe benefits using the statutory formula - pre-existing commitment
You have two cars with a reduced base value of $30,000 each. You enter into a contract with your employees on 1 May 2011 to provide cars to them for 6 years. Both cars travelled 30,000 kilometres in the year ending 31 March 2017 and have been available to your employees for their private use for the whole year. Your employees who use the cars have made contributions of $1,000 each for fuel during the year.
The transitional rate based on the kilometres travelled is 11%.
The calculation of the taxable value using the statutory formula for each car is:
($30,000 x 11%) – $1,000
= $2,300
You would write at item 23:
Example 10: Taxable value of car fringe benefits using the statutory formula - no pre-existing commitment
On 12 June 2016 you agreed to provide an employee with a car fringe benefit. The car was delivered on 1 July 2016 and was available to the employee for private use from that date.
From 1 July 2016 to 31 March 2017, the car travelled 31,000 kilometres.
The base value of the car is $32,000.
The employee did not make any contributions.
The calculation of the taxable value using the statutory method is: ($32,000 x 20%) x 274/365 = $4,804.
You would write at item 23: