Third method - no logbook and no requirement to travel 5,000 business kilometres or more

  • The employee must provide a declaration to you by the due date for lodging your annual FBT return or, where you are not required to lodge a return, by 21 May. You can find more information about the approved format for such a declaration in section 21.6. The declaration requires the employee to calculate a percentage of business use from the other information in the declaration.
  • The maximum percentage of business use that may be used is 33 1/3%. It is used when applying the otherwise deductible rule, with step 2 modified as follows:





Ignoring any payment or contribution made by the employee, calculate the taxable value of the fringe benefit.


Multiply the step 1 amount by the percentage of business use specified on the employee declaration (the maximum is 33 1/3%).


Now look at any payment or contribution made by the employee. How much of this payment or contribution is allowable as an income tax deduction to the employee?


Subtract the actual deductible amount (step 3) from the hypothetical deductible amount (step 2). The result is the amount by which the taxable value of the fringe benefit may be reduced.

    Last modified: 06 Dec 2011QC 17822