Employee's usual road toll expenditure

Where it is difficult for you to work out an employee's expenditure on road tolls for a pool car, you can determine the employee's usual private road toll expenditure in a normal working week and apply this to the employee's working year. You can use evidence such as electronic tag records, running sheets and employee attendance records to support your calculation.

Example 4: Pool car: employee's actual road toll expenditure

An employee has a salary sacrificed car and on work days travels from home to work and back on a toll road. During the day, the car is made available as a 'pool car' and is used by a number of employees.

The car is available for the employee's private use while at home, on weekends and while on holidays, during which time road tolls may also be incurred. An electronic toll tag (the account is held in your name) is attached to the car and records all road toll expenditure for that car. Each road toll recorded in relation to an employee is a residual benefit and you need to determine the taxable value of residual fringe benefits provided to the employee who has entered into the salary sacrifice arrangement.

You need to review the information available to confirm which road tolls are incurred during the 'pool car' period, for example on the electronic toll statement. These road tolls can be subtracted from the total road toll expenditure as they are incurred for business purposes and are otherwise deductible.

You can use factors such as the days and times the employee generally arrives at work and returns home; the days the employee is on holidays or which road tolls would generally be incurred on the private trip home to determine when the road tolls are incurred for private purposes.

The taxable value is the total expenditure on road tolls for private travel.

Example 5: Pool car: private use percentage

Assume the same facts as in Example 4, however the employer keeps records such as car log books which establish a business use percentage for the car. The percentage of business use is 75%.

The percentage of private use of a car for a particular year is the difference between 100 and the percentage of business use. In this case, the percentage of private use is 25%.

The FBT taxable value of the road toll expenditure is the total cost of the road tolls shown on the electronic toll statements multiplied by the percentage of private use.

Example 6: Pool car: employee's usual road toll expenditure

You have a number of cars and each car is used as a 'pool car' during the workday. After the workday has finished, your employees can take a car home and back to work the next day. You have a policy (which you enforce for all your cars) that the only private travel that is permitted is this private travel to and from work.

Some employees travel on a toll road on the way to and from work. Electronic toll tags (accounts held in your name) are attached to each of your cars which record all road toll expenditure for each car.

During the work day, because of your car usage policy, each car is only used for business purposes and any road tolls incurred are otherwise deductible.

Because different employees are using different cars on different days and at different times, it would be difficult for you when examining, for example, electronic toll statements, to determine which trips were for private travel.

In this situation, you may be able to determine, for each employee who has regular access to a car for private use, what would be a normal to and from work road toll expenditure in a normal work week and apply this to the employee's working year.

Using this information and supporting evidence you can determine the total private road toll expenditure for all employees over the full year. This amount would be used as the taxable value.

Supporting evidence may include electronic tag records, running sheets and employee attendance records.

    Last modified: 15 Mar 2007QC 19372