Car parking and FBT

What a car parking fringe benefit is

As an employer, you are providing a car parking fringe benefit on any day that all the following occur:

• Your employee parks their car (or a car you provide them) in a place that
  • you own, lease or control (your business premises)
  • is at or near their primary place of employment
  • is within 1 kilometre (by the shortest practicable route) of a commercial parking station that charges an all-day parking fee greater than the car parking threshold on both the
    • first day of the FBT year
    • day the benefit is provided.
• The car is parked for more than 4 hours between 7.00 am and 7.00 pm.
• Your employee drives their car between home and work, or vice versa, at least once.
• You aren't exempt from car parking fringe benefits.

Exemptions from car parking fringe benefits

You don't have to pay FBT for providing an employee with car parking, if any of the following apply:

• The employee has a disability.
• You are a small business.
• You are an exempt employer.

If you provide car parking occasionally, it may qualify for the minor benefits exemption if it both:

• has a value of less than $300
• would be considered unreasonable to treat it as a fringe benefit.

Employees with disabilities

If you provide car parking for an employee with a disability, you don't have to pay FBT. Your employee must both:

• be legally entitled to use a parking bay marked with the international symbol of access
• have a valid accessibility parking permit displayed on the car.

Small business parking exemption

You're exempt from paying FBT on car parking benefits if you meet all the following conditions:

• The parking isn't provided in a commercial car park.
• For the last income year before the relevant FBT year, either your
  • gross total income was less than $10 million
  • aggregated turnover was less than $50 million (how you calculate your aggregated turnover is the same as for the CGT small business entity eligibility).
• You are not a government body, a listed public company or a subsidiary of a listed public company.

Exempt employer types

You're exempt from paying FBT on car parking benefits if you're a:

• charity registered with the Australian Charities and Not-for-profits Commission (such as a public benevolent institution, health promotion charity or religious institution)
• scientific institution (other than an institution run for the purpose of profit or gain to its shareholders or members)
• public educational institution
• public or not-for-profit hospital, and the benefit is within the employee capping threshold
• public ambulance service, and the benefit is within the employee capping threshold.

What to do if you provide a car parking fringe benefit

You need to:

1. work out the taxable value of the car parking
2. keep the appropriate records
3. calculate how much FBT to pay
4. lodge your FBT return
5. pay the FBT amount
6. check if you should report the fringe benefit through Single Touch Payroll (or on your employee's payment summary).

Taxable value of car parking

The taxable value of car parking fringe benefits is calculated as follows:

1. Choose which valuation method you're going to use.
2. Determine the value of a car parking benefit.
3. Multiply by the number of parking benefits provided.
4. Reduce this amount by anything your employee pays towards the cost of the parking.

There are 5 methods you can choose from to determine the taxable value of car parking fringe benefits:

• commercial parking station method
• market value method
• average cost method
• 12-week register method
• spaces method.

Records you need to keep

With record keeping for FBT, you must keep records that:

• show how you calculated the taxable value of the car parking fringe benefit
• support any exemption or concession you used.

Each method has specific recording-keeping requirements – see FBT guide: 16.2.1 Taxable value – summary of methods.