• 16.5 Average cost method

    The taxable value of a car parking fringe benefit is the average of the lowest fees charged on relevant days by any operator of a commercial parking station within a one-kilometre radius of the premises on which the car is parked. The relevant days are the first and last days on which you provided a benefit during the FBT year. The taxable value is reduced by the amount of the employee's contribution towards the benefit.

    Average fees

    Calculate the average of the lowest fees by adding the lowest fee for the first relevant day to the lowest fee for the second relevant day and then dividing the sum by two.

    Lowest fees charged

    The parking fees you use for this method must be representative. The fee for any particular day is not representative if it differs substantially from the average lowest fee ordinarily charged for all-day parking. For this purpose, you can compare the fee for a particular day with the average fee charged during a four-week period beginning or ending on that particular day.

    For the purpose of averaging the lowest fees charged on each of the relevant days, it is not necessary to use the fees charged by the same commercial parking station operator. If there is more than one commercial parking station operator within a one-kilometre radius of the relevant premises, you may use the lowest fee charged by any of the operators on each of the relevant days.

    Number of benefits provided

    The average cost 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 average cost method.

    Basic records

    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.

    Additional records

    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.
      Last modified: 18 May 2017QC 17813