B – Cars using the operating cost method

Use GST-inclusive amounts where appropriate – do not show the actual value of the cars in the 'Gross taxable value (a)' column.

Employee contributions include:

  • amounts the employee pays directly to you for using a car
  • any car operating costs (for example, fuel) the employee has paid.

The total operating costs you use for calculating the fringe benefits taxable value are different from those you use for income tax purposes. Also, the income tax depreciation cost limit does not apply for FBT purposes.

Example: Calculate car fringe benefits using the operating cost method

An employer has a car with $10,000 in total operating costs for the FBT year. The employee who uses the car maintains a logbook. Based on the logbook and other usage patterns, the employer estimates the percentage of private use to be 30%. The employee has not made any contributions during the year.

The calculation for the car is as follows:

($10,000 x 30%) = $3,000

End of example
Last modified: 27 Mar 2015QC 44652