• Eligibility criteria

    The private use of a motor vehicle is exempt from FBT if all of the following conditions are satisfied:

    • the vehicle is a panel van, utility or other commercial vehicle (that is, one not designed principally to carry passengers)
    • the employee's private use of such a vehicle is limited to  
      • travel between home and work
      • travel that is incidental to travel in the course of duties of employment
      • non-work related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

    The exemption will also apply to the private use of a taxi if the taxi is owned or leased (eg not let on hire) if the employee's private use is limited to:

    • travel between home and work
    • travel that is incidental to travel in the course of duties of employment
    • non-work related use that is minor, infrequent and irregular (for example, occasional use of the vehicle to remove domestic rubbish).

    For more guidance on the private use of cars and home to work travel, refer to MT 2027 Fringe benefits tax: private use of cars: home to work travel.

    The exemption also applies to non-work related use by an employee's associate that is minor, infrequent and irregular.

    Usage requirements are not met

    If:

    Then:

    • the vehicle is a car
    • your employee's use of the car exceeds the limitations set out above, and
    • you elect to use the operating cost method

    your employee's use of the car is a car fringe benefit and all of the private use of the car, including travel between home and work, is taken into account in determining the business percentage.

    Note: If no log book records are maintained, the percentage of private use will be 100%.

    • the vehicle is a car
    • your employee's use of the car exceeds the limitations set out above, and
    • you use the statutory formula method

    your employee's use of the car is a car fringe benefit and all of the private use of the car, including travel between home and work, is taken into account in working out when the car was used or available for the private use of the employee.

    • the motor vehicle is not a car, and
    • your employee's use of the vehicle exceeds the limitations set out above.

    your employee's use of the vehicle is a residual fringe benefit.

    Note: The operating cost method may be used for valuing the benefit. Alternatively, if there is extensive business use the cents per kilometre method may be used to value the benefit.

      Last modified: 28 Jun 2016QC 21311