Do I Need to Pay Fringe Benefits Tax for Providing a Work Car to Staff?

Business,  Principals

Providing a work car to agency staff is undoubtedly a great incentive.

However, the Australian Taxation Office (ATO) is reminding agency owners that they may need to pay fringe benefits tax (FBT) if they’re providing a car to employees for their private use.

You make a car available for private use by an employee on any day that the car is either:

  • actually used for private purposes by an employee
  • available for the private use of the employee.

A car is considered available for your employee’s private use when it is:

  • used to travel to and from work
  • not at your premises and they are allowed to use it for private purposes
  • garaged at their home – regardless of whether they have permission to use it for private purposes.

For FBT purposes, a ‘car’ includes:

  • a sedan or station wagon
  • any other goods-carrying vehicle with a carrying capacity of less than one tonne, such as a panel van or utility (including four-wheel drive vehicles)
  • any other passenger-carrying vehicle designed to carry fewer than nine passengers.

If you’re not sure if you’re providing a car fringe benefit, the ATO’s virtual introductory sessions can help. You can register by selecting a date and time that suits you.

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