As an employer, you are providing a car parking fringe benefit on any day that all the following occur:
- your employee parks their car (or a car you provide them) in a place that
- you own, lease or control (your business premises)
- is at or near their primary place of employment
- is within 1 kilometre (by the shortest practicable route) of a commercial parking station that charges an all-day parking fee greater than the car parking threshold (and also charged a fee greater than the threshold on the first day of the FBT year)
- the car is parked for more than 4 hours between 7.00 am and 7.00 pm
- your employee drives their car between home and work, or vice versa, at least once
- you are not exempt from car parking fringe benefits.
For more information about these conditions, including determining whether a commercial parking station meets the required conditions, see FBT guide: 16 Car parking fringe benefits.
You don't have to pay FBT for providing an employee with car parking, if:
If you provide car parking occasionally, it may qualify for the minor benefits exemption if it has a value of less than $300 and it would be considered unreasonable to treat it as a fringe benefit.
If you provide car parking for an employee with a disability, you don't have to pay FBT. Your employee must:
- be legally entitled to use a parking bay marked with the international symbol of access
- have a valid accessibility parking permit displayed on the car.
You're exempt from paying FBT on car parking benefits if you meet all the following conditions:
- The parking is not provided in a commercial car park.
- For the last income year before the relevant FBT year, either your
- gross total income was less than $10 million
- aggregated turnover was less than $50 million.
- You are not a government body, a listed public company or a subsidiary of a listed public company.
You're exempt from paying FBT on car parking benefits if you're a:
- charity registered with the Australian Charities and Not-for-profits Commission (such as a public benevolent institution, health promotion charity or religious institution)
- scientific institution (other than an institution run for the purpose of profit or gain to its shareholders or members)
- public educational institution
- public or not-for-profit hospital, and the benefit is within the employee capping threshold
- public ambulance service, and the benefit is within the employee capping threshold.
You need to:
- work out the taxable value of the fringe benefit
- calculate how much FBT to pay
- lodge your FBT return
- pay the FBT amount
- check if you should report the fringe benefit through Single Touch Payroll (or on your employee's payment summary).
Claiming tax deductions
If you pay FBT for providing car parking, the FBT you pay is tax deductible.
The taxable value of car parking fringe benefits is calculated as follows:
- Determine the value of a car parking benefit.
- Multiply by the number of parking benefits provided.
- Reduce this amount by anything your employee pays towards the cost of the parking.
You can choose any of a number of methods to determine the taxable value of car parking fringe benefits:
- commercial parking station method
- market value method
- average cost method
- statutory formula method
- 12-week register method.
For more information about the methods, see FBT guide: 16 Car parking fringe benefits in our legal database.FBT on car parking, exemptions for small businesses and disabilities, how to calculate taxable value.