Step 1: Confirm that FBT applies to the benefit
If your employee's use of an eligible vehicle is limited to the uses eligible for exemption:
- there is no FBT on the employee's use of the vehicle
- you don't need to read the other steps.
If your employee's use of an eligible vehicle exceeds the uses eligible for exemption:
- it is a fringe benefit
- continue to step 2.
Step 2: Check the type of vehicle
If the vehicle is:
- a taxi, ute, panel van, or other goods-carrying vehicle designed to carry less than 1 tonne and fewer than 9 passengers (including the driver)
- you treat it the same as a car – see taxable value of a car fringe benefit
- you don't need to read the other steps
- designed to carry more than 1 tonne or at least 9 passengers (including the driver), or is any other commercial road vehicle
- you treat it as a residual fringe benefit
- continue to step 3.
Step 3: Determine the amount of private use
You need to know the amount of private use versus business use.
You don't have to keep a logbook, but if you have one you should use it to work out the extent of private use of the vehicle.
If you don't have a logbook, make a reasonable estimate. For example, if your employee drives the vehicle between home and work, you could determine this component of private use by multiplying the number of journeys during the year by the distance between the employee's home and place of employment.
Step 4: Calculate the taxable value of the benefit
You can use either the:
- operating cost method
- cents per kilometre method.
Whichever method you use, we assume that you provide the vehicle on a fully maintained basis, including fuel. If your employee provides fuel, the value of the benefit is based on the operating costs, excluding fuel.
Operating cost method
The operating cost method is the same as for cars. To calculate the taxable value of the fringe benefit under the operating cost method, you need to know:
- A, the total operating costs (including deemed costs for depreciation and interest)
- B, the percentage of private use
- C, the employee contribution.
You can then work out the taxable value as (A × B) − C.
For details on each of these, including examples, see FBT guide: 7.5 Operating cost method in our legal database.
Cents per kilometre method
If you don't have specific records, you can use the cents per kilometre method.
There are 3 steps to calculate the taxable value of the fringe benefit using the cents per kilometre method:
- Total the number of private kilometres travelled.
- Multiply by the Motor vehicle (other than a car) – cents per kilometre rate.
- Divide by 100 to convert the amount from cents to dollars.
For more information about how to calculate taxable value using this method, see FBT guide: 18.6 Taxable value of motor vehicles other than cars in our legal database.
Work out the taxable value of private use of a ute, van or other eligible vehicle.