16.3 Taxable value - the commercial parking station method
The taxable value of a car parking fringe benefit is the lowest fee charged for all-day parking on that day by any commercial parking station within a one-kilometre radius of the premises on which the car is parked. This is reduced by any amount the employee pays towards the cost of the fringe benefit.
Lowest fee for all-day parking
Where all-day parking fees are paid for on a weekly, monthly, yearly or other periodic basis, you can determine an equivalent daily rate by dividing the total fee by the number of business days in the period. For this purpose, a business day is a day other than a Saturday, Sunday or public holiday. For example, if a commercial parking station offers all-day parking for $8 a day or $30 a week, the lowest all-day parking fee charged by that parking station is $6.
An employee of a company is allowed to park his privately owned car in the basement of the company's building for three weeks (five days a week). There are two permanent all-day commercial car parking stations within one kilometre of the employer's building. The employee drives the car from home to work each day and parks it there for more than four hours each day between 7.00am and 7.00pm. There is no employee contribution.
At the beginning of the 2009 FBT year and also during the three-week period, parking station number one charges $5.50 a day and parking station number two charges $8.00 a day. Since there is a car parking station that charged more than the car parking threshold of $7.07 on 1 April 2008, there is a fringe benefit. To calculate the taxable value, the employer can use the lowest rate, that is, $5.50.
The taxable value of the car parking fringe benefit provided is $82.50 (15 days x $5.50).
Number of benefits provided
The commercial parking station method provides the taxable value of a single car parking fringe benefit. You can obtain the exact number of benefits provided only from records of actual use.
For this method, the FBT law does not contain a specific rule for determining the actual number of car parking fringe benefits that may arise from each car parking space, nor for determining how many car parking spaces are in a given area.
The following guidelines describe the minimum records acceptable to the Tax Office for car parking fringe benefits valued according to the commercial parking station method.
The minimum record you should keep is a declaration relating to the FBT year. If you do not keep any other records, you will be subject to FBT on the basis that a car parking fringe benefit arose on each business day of the year for all the available car parking spaces.
There is no specific format for the declaration, but it must include all of the following details:
- the number of car parking spaces available to be used by employees
- the number of business days in the FBT year
- the valuation method you have chosen to use
- the daily value of the car parking spaces.
Where the number of employees parking on the premises is always less than the number of available parking spaces, you should keep an additional declaration showing the actual number of employees who park on the premises.
Also record the days when no car parking fringe benefits arise for a car parking space (for example, where employees are absent) or those that are not ordinary business days for your business.
You should also keep records that show when:
- more than one car parking benefit arises for a particular car parking space, such as with shift workers
- you provide car parking benefits to employees outside normal business hours, for example, on weekends.