7.2 Taxable value

You can calculate the taxable value of a car fringe benefit using either of the following methods:

  • Statutory formula method - following the 2011 Budget, changes were made to the statutory formula method which has resulted in the old progressive statutory rates being replaced with a single statutory rate of 20% (subject to transitional rules), which applies regardless of kilometres travelled. This rate applies to all car fringe benefits after 7.30pm AEST on 10 May 2011, except where there is a 'pre-existing commitment' in place to provide the car (for a meaning of the term 'commitment' see section 7.4). The taxable value of the car fringe benefits is the statutory rate multiplied by the car's base value.
  • Operating cost method - the taxable value of the car fringe benefit is a percentage of the total costs of operating the car during the fringe benefits tax (FBT) year. The percentage varies with the extent of actual private use. The lower the incidence of actual private use, the lower the taxable value.
    Last modified: 08 May 2012QC 17818