Fringe benefits tax - a guide for employers

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Chapter 16 - Car parking fringe benefits

Relying on this Guide We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and your obligations. If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take. Some of the information on this Guide applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

16.1 What is a car parking benefit?

If you provide your employee or their associate with parking at a work car park, you may be providing them a car parking benefit. The parking can be on your business premises, or you may organise for your employee (or their associate) to park a car somewhere else. For example, you may have an agreement with the owner of a commercial parking station to provide parking at their parking station to your employees.

This Chapter provides you with more information and examples that relate to Taxation Ruling TR 2021/2 Fringe benefits tax: car parking benefits . Terms in bold are defined or discussed in that Ruling.

As with any fringe benefit, as the employer, you are required to calculate and meet the FBT liability for any car parking benefits provided to your employees.

You provide a car parking benefit when all of the following apply:

• Your employee or their associate parks a car in a car space at a work car park for a minimum parking period between 7:00 am and 7:00 pm.
• The work car park is located at or in the vicinity of the employee's primary place of employment , on that day.
• The car (including a van, utility, sports utility vehicle, all-wheel drive vehicles or similar vehicles designed to carry a load of less than 1 tonne and fewer than 9 passengers) must be
  • owned by or leased to the employee or their associate (for example, their spouse)
  • made available to the employee or their associate
  • a pool car, or
  • provided to the employee under a salary packaging arrangement.
• The employee used the carinconnection with travel between their place of residence and their primary place of employment on the day the car is parked.
• At least one commercial parking station is located within a one-kilometre radius of the work car park.
• The lowest representative fee charged to members of the public for all-day parking by any such commercial parking station is above the car parking threshold.
• The parking is not provided to an employee on a day where the employee is entitled to the use of a disabled persons' car parking space and displayed a valid disabled persons' car parking permit on the car.

If the benefit you provide is not a car parking benefit, you may still provide another benefit subject to FBT such as a car parking expense payment benefit (see section 9.9 ). If you provide a car space to an employee and it does not meet the conditions of a car parking benefit (and it is not a car parking expense payment benefit) you do not need to pay FBT on that benefit (see sections 9.8 and 18.11 ).

Some types of organisations, such as charities, government and educational or scientific institutions do not need to pay FBT on car spaces they provide (see section 16.3.2 ).

See also:

• Taxation Ruling TR 2021/2 Fringe benefits tax: car parking benefits
• section 39A of the FBTAA
• section 12 of the Fringe Benefits Tax Assessment Regulations 2018

Working out if you provided a car parking benefit

The following table helps you determine if you provided a car parking benefit to your employee on a particular day.

Table 1: Working out if you provided a car parking benefit

Steps	Action	Detail	Decision
Step 1	Did you reimburse an employee for, or pay on their behalf, the employee's car parking expenses?	Section 9.9 discusses car parking expense payment benefits.	No: go to the next Step. Yes: go to Step 13 .
Step 2	Did an employee (or their associate) park a car in a work car park anytime between 7:00 am and 7:00 pm?	Section 16.1.1 discusses work car park. Section 16.1.4 discusses the definition of a car.	No: go to Step 13 . Yes: go to the next Step.
Step 3	Was the car parked because the employee was entitled to the use of a disabled persons' car parking space and displayed a valid disabled persons' car parking permit on the car?	Section 16.3.1 discusses this exclusion.	No: go to the next Step. Yes: go to Step 14 .
Step 4	Are you an exempt employer?	Section 16.3.2 discusses the exemption that applies to certain employers.	No: go to the next Step. Yes: go to Step 14 .
Step 5	Are you a small business employer or was your total income for the last income year less than $50 million and not a public company, subsidiary of a public company or a government body?	Section 16.3.3 discusses when this exemption may apply.	No: go to the next Step. Yes: was the car was parked at a commercial parking station? Yes: go to the next Step. No: go to Step 13 .
Step 6	Is the parking provided on an ad hoc basis and has a value of less than $300?	Section 20.8 discusses the minor benefits exemption.	No: go to the next Step. Yes: go to Step 14 .
Step 7	Was there a commercial parking station within a one-kilometre radius of the work car park?	Section 16.1.7 discusses the radius. Section 16.1.7.1 discusses commercial parking stations and section 16.1.8 discusses representative fees.	No: go to Step 13 . Yes: go to the next Step.
Step 8	Did any of the commercial parking stations within a one-kilometre radius charge a lowest representative fee on the first business day of the FBT year above the car parking threshold?	For the current car parking threshold, refer to Fringe benefits tax – rates and thresholds . Section 16.1.8 discusses lowest representative fee.	No: go to Step 13 . Yes: go to the next Step.
Step 9	Was the car parked for the minimum parking period?	Section 16.1.2 discusses the minimum parking period.	No: go to Step 13 . Yes: go to the next Step.
Step 10	Was the work car park at or in the vicinity of the employee's primary place of employment?	Section 16.1.3 discusses the employee's primary place of employment on the day.	No: go to Step 13 . Yes: go to the next Step.
Step 11	Did your employee use the car in connection with travel between their place of residence and their primary place of employment at least once on the day?	Section 16.1.5 discusses this condition.	No: go to Step 13 . Yes: go to the next Step.
Step 12	You provided a car parking benefit.	Section 16.2 discusses how to work out the taxable value.	Work out the taxable value of the benefit you provide. Go to Table 2 .
Step 13	You did not provide a car parking benefit.	Section 9.9 discusses when a car parking expense payment benefit arises.	Determine whether the parking you provide gives rise to an eligible car parking expense payment benefit. Go to Chapter 9 .
Step 14	Even if you work out you provided a car parking benefit using this table, it is an exempt benefit.	Section 16.3.1 discusses this exclusion. Section 16.3.2 discusses the exemption that applies to certain employers.	You do not pay FBT on having provided parking to your employee.

16.1.1 Car parked in work car park anytime between 7:00 am and 7:00 pm

A work car park is any car space you provide (or you organise for someone else to provide) to your employees or their associates for them to park a car.

A car space is a space where a car can reasonably be parked. It does not need to be on bitumen or a paved surface and does not need to be marked as a parking bay.

A work car park can be located on your business premises or a premises that you use and control. For example, you might decide to lease an empty lot near your business to provide parking for your employees. However, a work car park cannot be at your employee's place of residence (for example, their driveway). If you provided more than one work car park for your employees to use, you must test whether each work car park separately meets all of the conditions in section 16.1 .

A work car park:

• can be in a commercial parking station (if you leased or made an agreement with the owner of the commercial parking station for your employees or their associates to park there) but it doesn't need to be a commercial parking station
• can be the area where pool cars or fleet cars are parked
• doesn't need to be operated with an intention to make a profit
• is not a space set aside in a car yard for the display of cars by a car dealer where the car being parked is an item of trading stock.

Not every car space provided in a work car park is subject to FBT. See sections 16.1.2 to 16.1.7 for additional conditions.

16.1.2 Parking must be provided in respect of the employee's employment

A benefit must be provided in respect of the employment of an employee. Where an employee parks in a car space on identical terms to non-employees, it is unlikely the parking is provided in respect of the employment of the employee as there is no benefit provided to the employee because of their employment. Terms include access, length of stay and the fee paid for car parking.

Example 1a – car park not provided in respect of employment

A Leisure Centre has a car park. Employees of the Leisure Centre park their cars in the car park. Parking is on a first-in basis, and access to the car park by an employee is on identical terms to the public.

The Leisure Centre (Employer) has not provided an employee with parking in respect of the employee's employment. Its employees' car parking is explained by it having business premises which include a car park, not the employees' employment.

Example 1b – car park provided in respect of employment

The Leisure Centre marks 10 of the parking bays as Reserved – Staff Only. Parking in the reserved parking bays is on a first-in basis as there are 30 staff and only 10 parking bays.

Employees are provided with preferential access to car parking, as there are a limited number of parking bays that are only available to employees. Therefore, even though access to a car park is not guaranteed, their employment relationship explains why each employee has the opportunity to park in a reserved parking bay. Therefore, the parking is provided in respect of an employee's employment.

Example 2 – provider of the car space

Delilah Pty Ltd has an arrangement with Parky Ltd under which Delilah has exclusive occupancy rights to 4 car spaces under Parky Ltd's business premises. Parky is obliged to provide the spaces free of charge to Delilah's employees.

As Delilah Pty Ltd has made the arrangement with Parky Ltd, Delilah Pty Ltd provides a benefit to its employees.

See also:

• subparagraph 39A(a)(i) of the FBTAA
• definition of 'associated premises' and 'business premises' in subsection 136(1) of the FBTAA
• Taxation Ruling TR 2000/4 Fringe benefits tax: meaning of 'business premises'

16.1.3 Minimum parking period

To get a benefit, the employee (or associate) must park a car on a work car park for the minimum parking period between 7:00 am and 7:00 pm on that day. The minimum parking period is more than 4 hours.

One work car park may give rise to more than one benefit, for example, where 2 employees each park their car for the minimum parking period in the same work car park on a given day.

The minimum parking period is a cumulative period, so the car may come and go during the day. Parking in different work car parks also counts toward the minimum parking period, as long as each work car park satisfies the conditions in sections 16.1.3 , 16.1.6 and 16.1.7 .

When counting the time parked, only consider the times between 7:00 am and 7:00 pm on that day. For example, if you provide parking for an employee working between 4:00 pm and 11:00 pm, this counts as 3 hours on the day (between 4:00 pm and 7:00 pm), so the minimum parking period condition is not satisfied.

Example 3 – minimum parking period requirement

Alan is employed by Bearly Ltd and generally performs his duties at Bearly Ltd's regional business premises (an office). Alan drives a pool car from home to work and parks it on a work car park at Bearly Ltd's regional office. After the car is parked, it is made available to other employees of Bearly Ltd. Various employees use the car on the day so that, in total, the car is not parked at the work car park for more than 4 hours.

A car parking benefit is not provided by Bearly Ltd to Alan because the car is not parked on the work car park for a total period of more than 4 hours on the day.

Example 4 – car pooling work car park

Car T is a pool car. George books Car T on Monday and removes it from the employer's car pool parking bay at 12:00 pm for a series of client visits. George travels from the various client premises to his home and garages the car at home on Monday night.

On Monday, George does not receive a car parking benefit for Car T in the car pool parking bay. This is because George did not use Car T to travel between home and his primary place of employment on Monday; instead, he travelled between a client's premises and his home.

On Tuesday, George drives Car T to work and returns it to the car pool parking bay by 9:00 am.

Car T is available for booking for the rest of Tuesday, and remains in the car pool parking bay between 9:00 am and 2:00 pm. Between 2:00 pm and 4:00 pm Car T is used by another employee for a short audit activity at a client's business premises. The employee returns the car to its bay at 4:00 pm, where it remains until the next day.

On Tuesday, George is provided with a car parking benefit (assuming the other conditions are satisfied) because George drove Car T from home to work on Tuesday and Car T was parked for a total period of more than 4 hours. A car fringe benefit is also provided in respect of Car T (see Chapter 7 ).

See also:

• paragraph 39A(1)(b) of the FBTAA

16.1.4 Location of the work car park

The work car park must be located at or in the vicinity of (near) the employee's primary place of employment on the relevant day for a car parking benefit to arise.

Where the work car park is located at the primary place of employment, this condition is satisfied. Where the work car park is not at the primary place of employment but in the vicinity of, or near to the primary place of employment, it may be more difficult to determine whether the work car park satisfies this condition. Consider whether the work car park and the place of employment are near to each other. That is, in close spatial and geographical proximity to each other.

Example 5a – work car park not near place of employment

You provide a work car park to your employees which is 100 metres away from your office. While only 100 metres apart, the work car park and your office are separated by a railway line with the nearest pedestrian crossing one kilometre away from the work car park. Therefore, employees who park in the work car park must travel at least 2 kilometres by foot to get to their workplace. The work car park is not near to, or in the vicinity of your office as the work car park and your office (your employees' primary place of employment) are not in close spatial and geographical proximity to each other.

Example 5b – work car park not near primary place of employment

You operate a coffee shop at an airport. You have a work car park for your employees located away from the airport terminal but within the airport precinct. The shortest route from the work car park to the coffee shop in the terminal building is approximately 3 kilometres. Employees are required to take a shuttle bus to the work car park. The shuttle bus trip takes 15 to 20 minutes, excluding waiting time. The shuttle bus stop is located just outside the coffee shop which employees use to get to their cars.

The work car park is not considered near to, or in the vicinity of the coffee shop as the car park and the primary place of employment are not in close spatial and geographical proximity to each other.

See also:

• paragraph 39A(1)(f) of the FBTAA

16.1.5 The definition of 'car'

Your employees must park a car in the work car park.

Cars include a passenger vehicle, a sports utility vehicle, a van or utility vehicle designed to carry a load of less than 1 tonne and fewer than 9 passengers.

The car may be:

• the employee's own
• provided to them under a salary packaging arrangement, or
• made available to them as a pool or fleet vehicle, which is owned or held by you.

Pool or fleet cars

Pool or fleet cars are not permanently allocated to particular employees, and are predominantly provided for operational (that is, work) use. However, on occasion, an employee may use a pool or feet car to commute between their place of residence and their primary place of employment. When not in use, pool or fleet cars may be parked in a work car park.

FBT may, therefore, apply to parking for pool or fleet cars when the other conditions in section 16.1 are met.

For there to be a car parking benefit, the pool car or fleet car must also result in a car fringe benefit being provided on that day. So on a day when providing a pool or fleet car results in a car fringe benefit being provided to your employee, providing a parking space for that car may also be a car parking benefit. The requirements are the same as for an employee parking their own car. In addition, it doesn't matter if the employee returns the car to the pool during the parking period and it is no longer under their control (see Example 3 ) nor if the employee garages the pool car at their home overnight as they are on call. In these situations, FBT may apply to parking of the pool or fleet car.

See also:

• section 7.1 What is a car fringe benefit?
• definition of 'car' in subsection 995-1(1) of the Income Tax Assessment Act 1997
• Explanatory Memorandum to the Taxation Laws Amendment (Car Parking) Bill 1992

Example 6 – pool cars

Geoff, an employee of Silverserve Pty Ltd undertakes a regional trip for his job. He takes a pool car on the trip. The pool car is normally parked in Silverserve's basement work car park.

On Monday, the car is parked in the basement for more than 4 hours, until Geoff takes it home on Monday evening. He drives it to the country the next day. On Tuesday evening, Geoff drives the car home before returning the car to the pool on his arrival at work on Wednesday morning. The car remains in the work car park for more than 4 hours on Wednesday.

A car benefit is provided to Geoff on Monday and Wednesday. In addition, Geoff received a car parking benefit on Monday and Wednesday, the days he used the car in connection with travel between his home and primary place of employment. It does not matter that the car was subject to the complete control of Silverserve Pty Ltd for most of Monday and Wednesday.

16.1.6 Commuting between the place of residence and the place of employment

For your employees to receive a car parking benefit on a day, they must travel between their place of residence and their primary place of employment – either before or after work. See Example 6 above.

The trip does not need to be a direct trip between their place of residence and place of employment to satisfy this condition. For example, an employee may use the car to travel between home and work, but may stop at shops on the way home or pick up a child from child care. In both instances, the car is still considered to be used 'in connection with' travel between their place of residence and primary place of employment.

In this case, place of residence has a wider meaning than the place where the employee resides (lives). It can include a place where the employee has sleeping accommodation, such as a hotel or serviced apartment. For example, your employee may ordinarily reside in Sydney, but use their car to travel to Canberra to work temporarily, and to drive between their hotel and your Canberra business premises while they are there. In this instance, the car is used in connection with travel between the place where they (temporarily) reside and their primary place of employment on the day.

See also:

• paragraph 39A(1)(g) of the FBTAA

16.1.7 Was there a commercial parking station within a one-kilometre radius of the work car park?

Not every car park qualifies as a commercial parking station (see section 16.1.7.1 ). If there is no commercial parking station within the one-kilometre radius of the work car park, a car parking benefit does not arise.

Measure the one-kilometre radius from the closest car entrances to the work car park and the commercial parking station. Use the shortest practicable route from one car park entrance to the other. The travel may be by foot, car, train or boat; whichever produces the shortest route.Where the shortest route can be travelled on foot, public thoroughfares such as arcades through shopping centres should be utilised in determining the distance.

An illegal or impractical shortcut through private property is not considered a practicable route. A route that is not available for an extended period of time is not a practicable route. For example, if a river crossing existed and was measured as part of a practicable route, should that river crossing be destroyed via a natural disaster, the river crossing will no longer be considered to be part of that practicable route until it is restored.

The one-kilometre radius may be measured by using an odometer reading, information available online (such as images), by measurement on a scale map or any other method (such as an application or tracking on a mobile device).

A new commercial parking station may be established within a one-kilometre radius of your work car park when previously there were no commercial parking stations within that radius. In these circumstances, where the new commercial parking station is the only commercial parking station within a one-kilometre radius, you will not immediately be providing car parking benefits. The earliest you could provide a car parking benefit is the first business day of the next FBT year when you can compare the fees charged by this commercial parking station (and any others that may also have opened) against the FBT car parking threshold.

If on the first business day of the FBT year any new commercial parking stations within the one-kilometre radius charge an all-day parking fee above the car parking threshold, employers who provide car parking to their employees may start to provide car parking fringe benefits from that day.

16.1.7.1 When does a commercial parking station qualify?

A commercial parking station is a commercial car parking facility which meets all of the following requirements, on a particular day:

• It is permanent (not a temporary or a 'pop up' car park).
• It offers all-day parking to the public in the ordinary course of business on payment of a fee. This means parking for a continuous period of at least 6 hours, between the hours of 7:00 am and 7:00 pm, is offered to any member of the public who accepts the car park terms and conditions or restrictions, for example, entering into a lease for a car space to park. It doesn't matter if your employees could or would park there.
• It is not on-street parking – parking on a street, road, lane, thoroughfare or footpath (or similar) where parking is paid for by inserting money in a meter or by obtaining a voucher (such as 'pay and display' parking).

A commercial car parking facility is a parking facility that displays certain characteristics that are hallmarks of such a facility. Hallmark characteristics allow characterisation of a commercial car parking facility to be determined objectively.

A parking facility operated by a professional car parking operator is a commercial car parking facility. This includes instances where a parking facility exists within another complex (such as an office, shopping centre or hospital) and the owner or lessor of that complex outsources the management of the parking facility to a professional car parking operator.

If a parking facility is not managed by a car parking operator and 2 or more of the following characteristics are present, the parking facility will generally be a commercial car parking facility:

• has clear signage visible from the street advertising that paid parking is available
• has mechanisms to control who can enter or exit the parking facility, or park at the facility. This may include boom gates, or 'pay and display' ticketing machines
• charges more than a nominal fee for paid parking. This includes charging a user for parking which is not all-day parking (such as parking at an hourly rate).

A facility's fees will usually be considered 'nominal' if they are significantly lower than the local market rate.

The commercial parking station must offer all-day parking in the ordinary course of business which may include a car parking facility operated by a not-for-profit organisation, such as a hospital, government agency or charity. A car parking facility may still qualify as a commercial parking station even if the facility has another purpose other than providing all-day parking, or if it is a dual-purpose parking facility. For example, a shopping centre operator runs a car park as part of their operations – to be used by shopping centre patrons and local commuters as part of a park and ride scheme. In this case, the shopping centre car park is a commercial parking station. In another example, an inner-city hospital offers parking to the public – whilst the majority of its parking spaces are reserved for medical staff, the remaining spaces are offered to the public for all-day parking. In this case, the hospital car park is also considered to be a commercial parking station.

16.1.7.2 Fees for all-day parking

A commercial parking station must charge a fee for all-day parking that cannot be nil. The parking facility must charge more than a nominal fee (usually a significantly lower rate than the local market rate) for paid parking. It does not matter if the fee is above the market rate, so long as the public is willing to pay the fee to park there.

The daily rate for all-day parking may vary due to early bird or online discounts or other types of fees that are charged (for example, hourly rates). It does not matter whether the all-day parking is booked out on the relevant day.

Example 7 – commercial parking station comparison

Towers Pty Ltd purchases 2 properties on which apartments will be built but makes the properties available (through various arrangements) for parking while awaiting development approval. It is not known how long the approvals will take to be granted.

Property 1 – previous commercial building

Property 1 is an office building with sealed car spaces that were used by employees of the previous tenants. Towers Pty Ltd leases the building's car parking facilities to Compark Ltd to operate. Compark Ltd is a well-known parking provider in the area. Compark Ltd charges a fee for daily all-day parking that is comparable with amounts charged for equivalent parking at nearby commercial parking stations. It also advertises parking spaces to the public on their website and installs parking signs and a pay and display machine on the property.

Property 1 is a permanent facility operated by a car parking operator, which offers spaces in the ordinary course of business to members of the public, for all-day parking for payment of a fee and therefore meets the requirements of a commercial parking station.

Property 2 – multi-level car park

Property 2 is a multi-level car park with a sealed surface, marked bays, and on-premises signs that advertise paid parking (including all-day parking) is available. Property 2 was operated by the previous owner, MrPark Ltd, as a commercial parking station. While Towers Pty Ltd awaits the building approvals, it leases the premises back to MrPark Ltd on a periodic monthly lease. MrPark Ltd continues to advertise the parking on their website for the same fees charged prior to the change in ownership of Property 2. The parking station is operated by a car parking operator and therefore is a commercial parking facility, regardless of the fact that the lessor has outsourced the management of the parking facility. Property 2 meets the requirements of a commercial parking station.

Example 8 – commercial parking station – outsourced management

A residential apartment complex has car spaces that are not being used by the residents. As investors own about half the apartments in the complex, the property manager arranges to lease the excess car spaces to a parking operator on their behalf. The property manager meets with numerous parking operators and negotiates terms with the parking operator who was able to present the best commercial deal to the owners of the apartments.

The operator advertises the availability of paid parking – the lowest daily rate is the same as that charged by nearby parking facilities.

The parking facility is operated by a car parking operator and therefore is a commercial parking station, regardless of the fact that the lessor has outsourced the management of the parking facility.

Example 9 – commercial parking station – car park sharing mobile apps

A mobile phone application, 'Park-it', allows car spaces to be listed for the public to book.

Joe occasionally uses Park-it to list his driveway as available for all-day parking.

Fancy Co is a marketing firm with an office building located in an area of the central business district where parking is at a premium. Fancy Co occasionally uses Park-it to list car spaces in its office building car park as being available for all-day parking when a senior executive takes annual leave. Fancy Co lists its car spaces at a fee comparable to nearby commercial parking stations. Fancy Co provides people who book its car spaces access to its car park by giving them a temporary access code.

Joe's driveway and Fancy Co's car park are not commercial parking stations. Joe and Fancy Co's arrangements are ad hoc and temporary, meaning they are not operating permanent commercial car parking facilities.

Example 10 – commercial parking station – shopping centre car park

Snazzy Ltd leases car spaces at an all-day car parking facility adjacent to its business premises. The only car park within a one-kilometre radius of Snazzy's premises is a shopping centre car park that operates between 6:00 am and midnight. The shopping centre is operated by the landlord of the shopping centre and provides 3-hour free parking if a purchase is made at the shopping centre and hourly rates if no purchase has been made. There are boom gates to control entry and exit to the facility. A commercial flat rate is charged for parking exceeding 6 hours. There is signage visible from the street and at each entrance advertising that car parking is available.

The shopping centre car park is a commercial parking station. All 3 hallmark characteristics of a commercial parking facility are evident. The parking facility makes all-day parking available to the public in the ordinary course of its business.

See also:

• paragraph 39A(1)(a)(ii) of the FBTAA
• section 39B of the FBTAA
• Explanatory Memorandum to the Taxation Laws Amendment (Car Parking) Bill 1992
• definition of 'commercial parking station' in subsection 136(1) of the FBTAA
• WT 94/87 and Commissioner of Taxation [1995] AATA 97

16.1.8 Is the lowest fee for a commercial parking station above the car parking threshold?

The lowest representative fee charged to members of the public for at least 6 continuous hours of parking between 7:00 am and 7:00 pm (all-day parking) by a commercial parking station within a one-kilometre radius of the work car park must be more than the car parking threshold on the first business day of the FBT year for a car parking benefit to arise during the FBT year. The lowest representative fee charged by a commercial parking station may change later during an FBT year, such that this fee may be different to the fee charged by a commercial parking station on the day the car is parked.

The fee for any particular day is not representative if it differs substantially from the average lowest fee usually charged for all-day parking by the same operator. The average fee is the average of fees charged during a 4-week period beginning or ending on that particular day.

All-day parking is parking for a continuous period of 6 hours or more. Therefore, the lowest representative fee charged for all-day parking cannot be calculated from the cumulative total of shorter periods. For example, the fee charged to someone for at least 6 hours of parking because a person came and went from the car park during the day to access discounted parking rates.

See also:

• Fringe benefits tax – rates and thresholds
• subparagraph 39A(1)(a)(iii) of the FBTAA
• section 39AA of the FBTAA
• section 39B of the FBTAA
• subsection 136(1) of the FBTAA

16.2 Calculating car parking fringe benefits

Once you determine that a car parking benefit is provided to your employee, you need to work out its taxable value. The law provides several ways in which you can calculate the taxable value.

The following table helps you to calculate and meet the FBT liability for a car parking benefit.

Table 2: Working out the taxable value

Step	Action	Detail	Decision
Step 1	Have you elected to value the total number of benefits you provide using either the Register method or the Spaces method prior to your FBT return due date?	Section 16.2.2 discussesthe requirements to be satisfied to make the election.	No: go to Step 2 . Yes: if you elected to use the Register method, calculate the value of the benefits based on the register (section 16.2.7 ). Go to Step 5 . If the register becomes invalid, go to Step 2 . If you elected to use the Spaces method, calculate the number of car spaces and value of the spaces (section 16.2.8 ). Go to Step 5 .
Step 2	You must calculate the number of benefits you provide.	One car space can give rise to more than one benefit on a day if more than one car is parked in a space for more than 4 hours in total. Section 16.2.3 outlines that you must keep records of the usage of the car spaces provided.	Go to Step 3 .
Step 3	Have you elected to value a benefit using the Market value method or Average cost method?	Section 16.2.2 discusses the requirements to be satisfied to make the election.	No: go to Step 4 . Yes: go to Step 5 . If your election is not valid go to Step 4 .
Step 4	Calculate the taxable value using the Commercial parking station method.	Sections 16.2.4.1 to 16.2.4.4 discuss how to identify the lowest fee charged.	This amount is the taxable value of the car parking fringe benefits you provide.
Step 5	Calculate the taxable value using the method you have chosen.	Section 16.2.5 discusses the requirements for the Market value method. Section 16.2.1 summarises the records you are required to keep for each of the methods. Section 16.2.6.1 outlines how you calculate the average cost for the Average cost method.	This amount is the taxable value of the car parking fringe benefits you provide for those car spaces or employees covered by your election.

16.2.1 Taxable value – summary of methods

There are 5 methods you can use to calculate the taxable value of a car parking fringe benefit. Each method has its own requirements. An overview of each method is provided here.

Commercial parking station method

• (sections 39C and 39E of the FBTAA)

Overview

• Use this method unless you elect to use an alternative method to value some or all of your car parking fringe benefits.
• Keep records of the number of car parking fringe benefits you provide.
• Identify the lowest representative fee charged by a commercial parking station for all-day parking (see sections 16.2.4.1 to 16.2.4.4 ) within a one-kilometre radius of each work car park (see section 16.1.6 ).
• The taxable value is equal to the lowest representative fee charged by any commercial parking station within that radius on the day you provided the car parking fringe benefit, provided it represents an arm's length fee (see section 16.2.4.4 ).

Additional record-keeping requirements

• number of car parking benefits provided – remembering that one car space might give rise to more than one benefit on a day (for example, if a space provides parking for more than 4 hours for more than one car)
• the days when no car parking benefits arise for a car space (for example, where employees are absent) or the days that are not ordinary business days for your business
• evidence of the lowest fee available to members of the public for all-day parking at the relevant time
• an advertisement or a screenshot of the operator's website showing fees charged for the day and any conditions for the relevant fee (for example, for an early bird rate, the hours in which the fee was available)
• a record of the sign displayed at the entrance to the car park where it shows any conditions attached to fees.

To use the following methods you must make an election (see section 16.2.2 )

Market value method

• (section 39D of the FBTAA)

Overview

• Keep records of the number of car parking benefits provided.
• Obtain a valuer's report (see section 16.2.5.2 ) from a qualified valuer (see section 16.2.5.1 ), which you need to receive before:
  • your return is lodged or due to be lodged, or
  • 21 May if you do not have to lodge, or
  • such further time that we allow.
• The taxable value for each benefit that you choose to value under this method is based on the valuer's report.

Additional record-keeping requirements

• number of car parking benefits provided – remembering that one car space might give rise to more than one benefit on a day (for example, if a space provides parking for more than 4 hours for more than one car)
• the days when no car parking benefits arise for a car space (for example, where employees are absent) or the days that are not ordinary business days for your business
• the valuer's report and the documentation you provided to the valuer.

Average cost method

• (sections 39DA and 39E of the FBTAA)

Overview

• Keep records of the number of car parking benefits provided.
• Identify the lowest representative fee charged by a commercial parking station for all-day parking (see sections 16.2.4.2 to 16.2.4.4 ) within a one-kilometre radius of each work car park (see section 16.1.6 ) on the first day of the FBT year a car parking benefit is provided (A) and the last day of the FBT year a car parking benefit is provided (B) and calculate the average cost as follows:

  A + B ÷ 2

• That average cost is the taxable value of each car parking fringe benefit covered by your election.

Additional record-keeping requirements

• number of car parking benefits provided – remembering that one car space might give rise to more than one benefit on a day (for example, if a space provides parking for more than 4 hours for more than one car)
• the days when no car parking benefits arise for a car space (for example, where employees are absent) or the days that are not ordinary business days for your business
• evidence of the lowest fee available to members of the public for all-day parking at the relevant times
• an advertisement or a screenshot of the operator's website showing fees charged for the day and any conditions for the relevant fee (for example, for an early bird rate, the hours in which the fee was available)
• a record of the sign displayed at the entrance to the car park where it shows any conditions attached to fees.

Register method

• (sections 39G to 39GH of the FBTAA)

Overview

• You don't need to keep records of car parking benefits provided during an FBT year (see section 16.2.7.1 ).
• Rather, every 5 years, you must record car parking benefits provided over a 12-week period (see section 16.2.7.3 ).
• The 12-week period must be representative of your usual provision of car parking fringe benefits (see section 16.2.7.4 ) and must contain certain details (see section 16.2.7.2 ).
• Using one of the methods above and your 12-week register, work out the total taxable value of car parking fringe benefits provided to the employees covered by your election, and then calculate using a formula (see section 16.2.7.5 ) the total taxable value of the car parking fringe benefits you have provided during the FBT year.

Additional record-keeping requirements

• records of car parking benefits provided during the 12-week register period (and every 5 years thereafter if there are no significant changes to usage) – remembering that one car space might give rise to more than one benefit on a day
• the register that is created representing the particular 12-week period
• records of how the value of the benefits that the register is based on were calculated and why the particular 12-week period was selected
• records that illustrate that the register was representative of usage for the first year in which it is valued
• evidence that the number of benefits has not increased by more than 10% since the register was kept (through ad hoc monitoring).

Spaces method

• (sections 39F to 39FE of the FBTAA)
• You calculate a daily rate amount using the commercial parking station method, the market value method or the average cost method (assuming there was no recipients contribution) for each car space which gave rise to at least one car parking benefit in the FBT year for an employee covered by your election.
• You then use the statutory formula to calculate the total value of all benefits provided to your employees covered by your election (see section 16.2.8.1 ).

Additional record-keeping requirements

• evidence showing the number of employees who park on a work car park and number of spaces provided, where the number of car spaces exceeds employee numbers see sections 16.2.8.2 to 16.2.8.3 .
• evidence showing the first and last day the car spaces in the work car park were available
• evidence showing the number of employees and spaces at the beginning and end of the FBT year
• evidence showing the fee, number of employees and number of eligible spaces are each representative
• other evidence required to support the method chosen to value the benefit.

16.2.2 Making an election

You must use the Commercial parking station method unless you elect to use an alternative method. You may elect to use different methods in different years.

If you elect to use an alternative method, your election can be in writing or be established by your calculations.

If you elect to use the Market value or Average cost method, your calculations should demonstrate:

• whether it applies to any or all of your car parking benefits, and
• the daily value of the car parking benefits.

If you elect to use the Spaces method or the Register method, your calculations should demonstrate whether the election made applies to all employees, particular employees or all employees of a particular class (for example, only covers those employees who do not travel for work once they arrive at their primary place of employment for the day).

For the Spaces method, your calculations should also demonstrate the number of car spaces available to be used by employees.

Where you elect to use a particular method for only some of the parking benefits provided to your employees, the taxable value calculated under the method only applies to the employees covered by the election. The taxable value of all or some of the remaining car parking benefits provided can be covered by another alternative method or the default Commercial parking station method.

After you lodge your FBT return, you cannot change the method used to value a car parking fringe benefit or revoke your election. However, in certain specific circumstances, the Commissioner may allow you to value the parking benefit using the Commercial parking station method instead of one of the other methods elected.

16.2.3 Record keeping

You need to keep records with enough detail so that if asked, you can show how you arrived at the taxable value of the car parking fringe benefits. You need to retain these records for 5 years.

See also:

• section 132 of the FBTAA
• Chapter 4 on FBT record keeping
• section 16.2.7.1 for record-keeping requirements when using the Register method.

16.2.4 Commercial parking station method

16.2.4.1 Commercial parking station method – identifying the lowest fee on each day

The taxable value of a car parking fringe benefit provided to an employee is the lowest fee charged to members of the public for all-day parking on that day by any commercial parking station within a one-kilometre radius of the work car park. This is reduced by any amount the employee pays towards the cost of the fringe benefit. This must be done on each day a car parking benefit is provided.

16.2.4.2 Commercial parking station method – working out the lowest daily fee from periodic fees

Where all-day parking fees are paid for on a periodic basis, you can determine an equivalent daily rate by dividing the total fee by the number of business days in the period (which includes the day the parking benefit is provided). For this purpose, a business day is a day other than a Saturday, Sunday or public holiday for the State or Territory where the commercial parking station is located. For example, if a commercial parking station offers all-day parking for $12 a day or $50 a week, the lowest all-day parking fee charged by that parking station is $10 ($50 weekly rate ÷ 5 business days).

16.2.4.3 Commercial parking station method – the lowest daily fee based on an early bird rate

The lowest fee charged may include fees charged on early bird parking or car pooling arrangements, where a reasonable number of car spaces are set aside for those purposes.

Example 11 – lowest fee is the early bird rate

Apex Parking charges $18 a day for early bird parking ( entry before 7:30 am), $10 hourly from 7:30 am to 6:00 pm with a maximum fee of $50 for the day and a $9 flat rate for cars parked between 6:00 pm and midnight. If someone pre-books their early bird parking online, Apex Parking charges $17 for the day, but there is a $2 booking fee (so the overall fee is $19).

The lowest fee charged by Apex Parking between 7:00 am and 7:00 pm is $18 and this is used in calculating the taxable value under the Commercial parking station method.

16.2.4.4 Commercial parking station method – restrictions on the lowest daily fee

The lowest fee charged cannot be:

• nil
• a fee charged to store a car for a long-term fixed period (such a fee is not a fee for daily parking as it prevents a vehicle from being removed from the storage bay on a daily basis)
• a fee that is not available on the day the car parking benefit is provided.

There are rules that prevent manipulation of the lowest daily fee. For example, the lowest daily fee must be set aside and replaced if the fee:

• is set for the main purpose of reducing FBT
• comes about because the operator and the customer were not at arm's length.

Example 12 – lowest fee

Qstore Pty Ltd is working out the taxable value of the car parking fringe benefits it has provided to its employees.

There are 2 commercial parking stations within one-kilometre of Qstore's work car park. On 1 April 2022 (the first business day of the 2023 FBT year), one commercial parking station charged $5.50 for all-day parking, and the other charged $10 for all-day parking. Since one of those commercial parking stations charged more than the car parking threshold of $9.72 on 1 April 2022, Qstore may, subject to the other conditions being met, be providing car parking benefits. In calculating the taxable value of any car parking benefits provided, Qstore can use the lower rate of $5.50.

Example 13 – daily rate equivalent

Rent-a-spot is a commercial parking station. Its all-day parking fees are lower the greater the financial commitment. Rent-a-spot customers can prepay for their parking on a weekly, fortnightly or monthly basis.

A Rent-a-spot customer pays $272 to park their car for a month with 22 business days. Rent-a-Spot's facility is open 24 hours a day, 7 days a week. Cars parked on longer term rates are able to enter and exit multiple times a day.

To work out the daily rate equivalent from this monthly rate, divide the monthly rate by the business days in the month.

Total fee ÷ Business days in period

$272 ÷ 22 = $12.36

The lowest rate charged for all-day parking on a particular day by Rent-a-spot is $12.36.

16.2.5 Market value method

16.2.5.1 Market value method – qualified valuer

To use the Market value method, you must obtain a valuation report from a suitably qualified valuer before you lodge your FBT return for the year and base the taxable values of the car parking fringe benefits you provided on that report.

A suitably qualified valuer is a person with expertise in valuing parking facilities, either through relevant experience or by attaining relevant professional qualifications. The valuer must be at arm's length to the valuation.

There is no requirement that the valuer be registered, and registration on its own does not mean that the valuer is suitably qualified. A person who is acceptable as an expert witness on the issue of valuing parking facilities before a court or tribunal is a suitably qualified valuer.

There may be one or more methodologies for working out the value of the car parking benefit (based on valuation industry standards and the available data). The market valuation may differ from the actual rates charged for car parking.

See also:

• Market valuation for tax purposes

16.2.5.2 Market value method – details required for a valuation report

A valuation report should include:

• a description of the car space, including the precise description of the location of the work car park valued (either the street address or block and section number)
• a list of the car parking facilities on which the valuation is based (with information on locality, grading, price, and weighting)
• the purpose and context of valuation
• the date of valuation
• method or methods used
• the specific value, including the number of car spaces at different car parking facilities valued, and the value of the car spaces based on a daily rate
• information and assumptions used for the valuation
• material risks
• any use of previous valuations
• explanation of material differences between valuation and value of car parking facilities near the work car park or differences between current to previous valuations
• expert reports and the use of experts including sufficient detail to confirm that the expert is sufficiently qualified and they are at arm's length in relation to the valuation
• the terms of engagement and the relationship between you and the valuer including a declaration stating that the valuer is at arm's length in relation to the valuation
• working papers
• disclaimers and indemnities that affect the valuation process
• the valuer's details and signature, that is, the full name of the valuer and a description of their qualifications as a valuer.

The following factors may be relevant when considering a valuation:

• the cost and availability of a car space at a commercial parking station of a similar standard near to the work car park being valued
• the impact of monopolies or market forces
• recent economic trends and anomalies.

See also:

• Valuation reports

16.2.5.3 Market value method – things to keep in mind

When engaging a valuer, it is important to keep in mind:

• It is your responsibility to get the taxable value of the car parking benefit correct, even where you rely on a valuation report.
• If you doubt a valuation is correct (or whether the valuer is qualified), check and ask for more information. For example, a reasonable person would be expected to seek more information where the fee provided in the report is substantially less than the known fees charged in the area or where the fee is for a property which is not known to be available for parking by members of the public.
• You should engage a valuer who is suitably qualified. If you doubt whether the valuer is suitably qualified, approach us and we will assist you.
• The valuer needs to make the valuation without any undue commercial or personal influence, interference or direction from you.
• You need to obtain the valuer's report annually before the date of lodgment of your FBT return for that year, or such later date as the Commissioner allows.

Example 14 – non-arm's length valuation

Sue has been employed for 5 years by Undercover Parking as a sales manager. Her duties include assessing the value of car parking facilities managed by Undercover and determining the price charged to commercial clients. Although she has no formal qualifications in property valuation, she is considered a suitably qualified valuer based on her experience. Sue is asked by her manager, in the ordinary course of her duties, to prepare a market valuation on Undercover Parking's work car park.

Undercover Parking cannot rely on a valuation prepared by Sue to value the car parking benefits it provided. Sue is an employee of Undercover Parking and is contracted, as an employee, to act under the direction and control of Undercover Parking in providing the valuation. Sue cannot, given the nature of her relationship with Undercover Parking, provide an arm's length valuation.

16.2.6 Average cost method

16.2.6.1 Average cost method – calculating the average cost

To calculate the taxable value of any or all of your car parking benefits you provided in an FBT year using the average cost method, use the following formula:

(A + B) ÷ 2

Where:

• A is Lowest representative fee charged on the first day a car parking benefit is provided in the FBT year
• B is Lowest representative fee charged on the last day a car parking benefit is provided in the FBT year

The lowest fee charged is the lowest representative fee charged to members of the public for all day parking by any operator of a commercial parking station within a one-kilometre radius of the work car park. Section 16.1.8 explains when fees are representative.

To average the lowest fees charged on each of the relevant days, you do not need to use the fees charged by the same commercial parking station. If there is more than one commercial parking station operator within a one-kilometre radius of the work car park, you may use the lowest fee charged to members of the public by any of the operators on each of the relevant days. The relevant days are the first and last day of the FBT year on which a car parking benefit is provided.

Example 15 – multiple car parking facilities provided

For the whole of the 2022-23 FBT year, Olive Pty Ltd provided car parking to its employees at 2 work car parks (car park A and car park B) near its headquarters, which is the primary place of employment for all its employees. Employees use either car park A or car park B (but not both).

Olive Pty Ltd elects to apply the Average cost method to all the car parking fringe benefits it provides in the 2022-23 FBT year.

On 1 April 2022:

• the lowest fee charged by a commercial parking station (PCP 1) within a one-kilometre radius of car park A was $17.
• the lowest fee charged by a commercial parking station (PCP 2) within a one-kilometre radius of car park B was $10.

On 31 March 2023:

• the lowest fee charged by PCP 1 was $20.
• the lowest fee charged by PCP 2 was $18.
• the lowest fee charged by a commercial parking station (PCP 3) was $15.

PCP 3 opened during the 2022-23 FBT year within a one-kilometre radius of car park B. PCP 2 and PCP 3 are not within a one-kilometre radius of car park A.

The taxable value of car parking benefits provided in car park A using the Average cost method can only be worked out by referring to commercial parking stations within a one-kilometre radius of that particular work car park. Therefore, the lowest fees charged by PCP 2 and PCP 3 cannot be used to calculate an average cost for car parking benefits provided at car park A because they are more than one-kilometre from car park A. However, they can be used to calculate the average cost for car parking fringe benefits provided at car park B.

Therefore, the average cost for car parking fringe benefits provided at:

• car park A is $18.50 ((17 + 20) ÷ 2) using the lowest fees charged by PCP 1.
• car park B is $12.50 ((10 + 15) ÷ 2) using the lowest fees charged by PCP 2 and PCP 3.

16.2.7 Register method

16.2.7.1 Register method – keeping a 12-week register

To calculate the taxable value of the car parking benefits provided to some or all of your employees in an FBT year using the Register method, you must keep a register for a continuous period of 12 weeks throughout which car parking benefits are provided to employees covered by your election. The period you choose must be representative of ordinary use of the work car park by those employees during the first FBT year. You can't use a register compiled over a period that does not reflect ordinary use (for example, during a Christmas and New year shutdown).

The register must include:

• the date on which each car was parked
• whether the car was parked for more than 4 hours
• whether the car was driven between the employee's place of residence and primary place of employment on that day
• the place where the car was parked.

To be valid, you must record these details as soon as practicable after the details become known to you. You may automate the register using electronic devices (such as GPS), as long as you collect the required details.

See also:

• sections 39GE and 39GG of the FBTAA.

Example 16 – automated register

Nifty Ltd uses GPS devices to monitor all parking by its employees in its work car park. Each GPS device records where the car is parked and the time and date the car enters and exits the work car park. Nifty Ltd uses software to produce a report registering entry and exit times and the hours each car is parked.

As the GPS device was fitted to all of the cars for which a car parking benefit may arise during an FBT year, Nifty Ltd can rely on the report as its 12-week register.

16.2.7.2 Register method – keeping records throughout the FBT year

If you keep a valid register, you are not required to keep records of the car parking benefits you provided to employees you have elected to cover using the Register method. However, you must maintain records which show you conducted periodic reviews to confirm there were no changes in use. The Register method gives a total taxable value for all the fringe benefits for employees you elected to value using this method.

16.2.7.3 Register method – how long is a register valid?

Generally, a register is valid for the FBT year in which the 12-week period occurs, and the 4 following FBT years. However, if the 12-week period begins in one FBT year and ends in the following FBT year, the register is valid only for the second FBT year and the 4 following FBT years. After the end of the fifth FBT year you must prepare a new register.

See also:

• section 39GF of the FBTAA

16.2.7.4 Register method – when it becomes invalid

A register is not valid for an FBT year if:

• the 12-week period in which the register was kept was not representative of the car parking fringe benefits you provided during that FBT year to employees covered by the election
• the number of car parking benefits you provide to employees covered by your election to use the Register method increased by more than 10% in the previous FBT year
• you replace it with a new register in that FBT year covering the same employee
• it omits the required details
• the information required is not recorded as soon as practicable after it is known
• it contains false or misleading information.

As part of your annual FBT governance processes, you should consider whether the number of car parking benefits you provided to employees covered by your election to use the Register method has increased.

See also:

• sections 39GF to 39GH of the FBTAA

16.2.7.5 Register method – calculating the value

You calculate the taxable value of car parking fringe benefits provided to employees covered by your election using the following steps:

Step 1:

Using the Commercial parking station method, the Market value method or the Average cost method, work out the total taxable value of car parking fringe benefits provided to employees covered by your election using the information in your 12-week register.

Step 2:

Multiply your Step 1 amount by (52 ÷ 12).

Step 3:

Work out the number of days in the FBT year any employee covered by your election to use the Register method was provided with a car parking benefit.

It begins on the first day in the FBT year on which you provide a car parking benefit to an employee covered by your election, and ends on the last day in the FBT year on which you provide a car parking fringe benefit to an employee covered by your election.

Step 4:

Divide your Step 3 amount by 366. (Use 366 even where it is not a leap year.)

Step 5:

Multiply your Step 2 amount by your Step 4 amount.

The result is your total taxable value of the car parking fringe benefits you provided to employees covered by your election for the FBT year.

See also:

• section 39GB of the FBTAA
• section 39GD of the FBTAA

Example 17 – 12-week register

Imps Pty Ltd starts providing car parking benefits on 1 October 2019 and continues to do so for the rest of the 2019-20 FBT year. The register it kept for 12 weeks records it provided 250 car parking benefits to its employees covered by the election. Using the Market value method, Imps Pty Ltd establishes that the taxable value of each car parking fringe benefit is $10 (being an arm's length value of $20 less $10 recipient contribution). There were 183 days between 1 October 2019 and 31 March 2020.

Based on the formula above, the taxable value of the car parking fringe benefits provided by Imps Pty Ltd to employees covered by its election is $5,416.67. This is calculated under the Register method as follows:

Step 1:

The total taxable value of car parking benefits in Imps Pty Ltd's 12-week register is $2,500 (250 car parking benefits provided, multiplied by their market value of $10 per benefit)

Step 2:

$2,500 × (52 ÷ 12) = $10,833.33

Step 3:

N umber of days the benefit was provided = 183

Step 4:

183 ÷ 366 = 0.5

Step 5:

$10,833 × 0.5 = $5,416.67

16.2.8 Spaces method

16.2.8.1 Spaces method – working out taxable value

To calculate the taxable value of the car parking benefits provided to some or all of your employees in an FBT year using the Spaces method, use the following formula:

For each car space which resulted in you providing a car parking benefit in the FBT year to an employee covered by your election to use the Spaces method:

PART 1

Step 1:

Calculate the daily rate amount.

The daily rate amount for each space is the taxable value amount of the car parking fringe benefit worked out using the Commercial parking station method, the Market value method or the Average cost method assuming there were no recipients contribution.

Step 2:

Calculate the availability period for the space.

The availability period for a space begins on the first day of the FBT year on which a car parking benefit for the space is provided (for an employee covered by the election) and ends on the last day of that year the car parking benefit for the car space is provided (for an employee covered by the election).

Step 3:

Divide your Step 2 amount by 366. (Use 366 even when it is not a leap year).

Step 4:

Multiply your Step 1 amount by the Step 3 amount.

Step 5:

Multiply your Step 4 amount by 228.

PART 2

Step 6:

Sum the result for each car space to calculate the total for all car spaces which resulted in you providing a car parking fringe benefit to employees covered by your election to use the Spaces method.

This is called your total statutory benefit.

Step 7:

If the average number of employees covered by the election is less than the average number of spaces made available to those employees see section 16.2.8.2 to calculate your modified total statutory benefit.

PART 3

Step 8:

Obtain the total of all employee contributions for all employees covered by your election to use the Spaces method. It does not matter if the contributions are for more than 228 days.

Step 9:

Reduce your Step 6 amount (or your modified Step 7 amount) by the Step 8 amount. The amount remaining is the total taxable value of the car parking fringe benefits for employees that you elected to value using the Spaces method.

See also:

• sections 39FA to 39FD of the FBTAA

16.2.8.2 Spaces method – where average number of employees is less than average number of spaces

If during the parking period the average number of employees covered by your election is less than the average number of spaces made available to those employees, calculate your modified total statutory amount using the following formula:

Step 1:

Calculate the average number of employees, using the following formula:

(A + B) ÷ 2

Where:

• A is number of employees covered by the election at the beginning of the parking period
• B is number of employees covered by the election at the end of the parking period

Step 2:

Calculate the average number of spaces, using the following formula:

(A + B) ÷ 2

Where:

• A is number of spaces made available to employees covered by the election at the beginning of the parking period
• B is Number of spaces made available to employees covered by the election at the end of the parking period

Step 3:

Calculate your modified total statutory benefit by multiplying your total statutory benefit (from Step 6 above) by the following fraction:

Average number of employees ÷ average number of spaces

Parking period

The parking period:

• begins on the first day in the FBT year on which a car space results in you providing a car parking fringe benefit to an employee covered by your election to use the Spaces method and
• ends on the last day in the FBT year on which a car space results in you providing a car parking fringe benefit to an employee covered by your election to use the Spaces method.

Average number of employees and average number of spaces must be representative

You cannot use the Spaces method if either or both of the number of employees and number of spaces used in your calculations is not representative. Those numbers are not representative if one or both differ substantially from the average number throughout whichever of the following periods you choose:

• the 4-week period ending on the first day of the parking period, or
• the 4-week period beginning on the last day of the parking period.

Example 18 – the Spaces method

Squeeky Clean starts providing car parking fringe benefits for each car space to its employees on 1 October 2022 and continues to do so for 182 days to 31 March 2023. Squeeky Clean elects to use the Spaces method for all of its employees. Squeeky Clean has 4 car spaces available for use by its 3 employees. Using the average cost method, Squeeky Clean establishes that the daily rate amount of each car parking fringe benefit for each car space is $10 (using the average cost method).

Between 31 March 2023 and 28 April 2023 (4-week test period), the average number of spaces is three and a half (one of the spaces is resurfaced during this time). The number of spaces made available from 1 October 2022 to 31 March 2023, being 4, is representative as it does not substantially differ from the average number of spaces available during the 4-week test period.

Each employee is required to contribute $30 a week for parking in the car parks.

Based on the Spaces method formula, the total taxable value of the car parking fringe benefits is $1,061.31 which is calculated as follows:

Step 1:

$10 (using the Average cost method)

Step 2:

182 days (1 October 2022 to 31 March 2023)

Step 3:

182 (Step 2 days) ÷ 366 = 0.49

Step 4:

$10 (Step 1 amount) × 0.49 (Step 3 amount) = $4.97

Step 5:

$4.97 (Step 4 amount) × 228 = $1,133.77

Step 6:

$1,133.77 (Step 5 amount for each space) × 4 spaces = $4,535.08

Step 7:

Step 7 applies because the average number of employees covered by the election to use the Spaces method is less than the average number of spaces.

Step 6 amount × (average number of employees ÷ average number of spaces)

$4,535.08 × (3 ÷ 4) = $3,401.31

Step 8:

$30 × 26 weeks × 3 employees = $2,340

Step 9:

$3,401.31 (Step 7 amount) – $2,340 (Step 8 amount) = $1,061.31

16.3 Ancillary matters

16.3.1 Parking not subject to FBT

You do not pay FBT on:

• a car parking benefit that is
  • an expense payment benefit and is not a car parking expense payment fringe benefit (see sections 9.8 and 9.9 Expense payment fringe benefits)
  • a minor benefit (see section 20.8 Other exemptions)
  • a residual benefit that is the provision of motor vehicle parking that does not fall within the requirements of car parking benefits described in this chapter and is not a car parking expense payment benefit. For example, where
• the provision of parking is for a motorcycle or an e-bike (not cars)
• the parking is for cars that are not used by your employees to travel between their primary place of employment and their primary place of residence
• the car space provided is not near to your employee's primary place of employment on that day.
• a car space provided to disabled employees who are entitled to use a disabled person's car parking space and display a valid disabled person's car parking permit. A valid disabled person's car parking permit is a permit, label or other document issued by the appropriate authority in the relevant State or Territory authorising your employee to park in a car space that is designated for the exclusive use of disabled persons.

See also:

• paragraph 39A(1)(h) of the FBTAA
• section 12 of the Fringe Benefits Tax Assessment Regulations 2018
• definitions of 'disabled persons' car parking permit' and 'disabled persons' car parking space' in section 5 of the Fringe Benefits Tax Assessment Regulations 2018

16.3.2 Class of exempt employers

You do not provide a car parking benefit if you are:

• a scientific institution (other than an institution run for profit or gain to its shareholders or members)
• a registered charity
• a public educational institution, or
• a government body, but only for an employee who is employed exclusively in, or in connection with, a public educational institution.

You may be subject to FBT on the car space if you provide an expense payment benefit (if the car space is also not an eligible car parking expense payment benefit).

See also:

• section 58G of the FBTAA
• section 9.9 of this Guide discusses when a car space is an eligible car parking expense payment benefit.

16.3.3 Small business employers

A car parking benefit is an exempt benefit where:

• the work car park is not a commercial parking station
• you are not a government body or a listed public company or a subsidiary of a listed public company on the day the benefit is provided, and
• either
  • you were a small business entity (defined in section 328-110 of the Income Tax Assessment Act 1997 ) for the last income year before the relevant FBT year
  • your total income for the last income year before the relevant FBT year was less than $50 million. For this purpose, your income includes ordinary income and statutory income as defined in the Income Tax Assessment Act 1997 ; that is, total assessable income before any deductions.

See also:

• section 58GA of the FBTAA

Latest update

November 2023

Section	Changes and updates
Entire chapter	The Chapter has been updated following the amendment to TR 2021/2 that addressed the concept of 'primary place of employment' and to provide further guidance on contemporary car parking arrangements. Minor changes to style and expression have also been made throughout.

Details of previous updates are available through the versions linked to in the table below.

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You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

ATO references:
NO Fringe benefits tax - a guide for employers