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  • Car fringe benefits

    Employers may be providing a car fringe benefit if they make available a car they own or lease to an employee for their private use.

    For fringe benefits tax (FBT) purposes, a car is any of the following:

    • a sedan or station wagon
    • any other goods-carrying vehicle with a carrying capacity of less than one tonne, such as a panel van or utility (including four-wheel drive vehicles)
    • any other passenger-carrying vehicle designed to carry fewer than nine passengers.

    If the vehicle is not a car, and the employee has private use of it, the employer may be providing a residual fringe benefit rather than a car fringe benefit.

    Media: Car fringe benefits
    http://tv.ato.gov.au/ato-tv/media?v=bd1bdiuba933nnExternal Link (Duration: 00:50)

    Private use

    A car is taken to be available for the private use of an employee on any day they or their associates use it, or are allowed to use it, for private purposes.

    If a car is garaged at or near the employee's home, even if only for security reasons, it is taken to be available for their private use regardless of whether or not they have permission to use the car privately. Similarly, where the place of employment and residence are the same, the car is taken to be available for the private use of the employee.

    Generally, travel to and from work is private use of a vehicle.

    Exempt car benefits

    There are some circumstances where use of a car is exempt from FBT. For example, an employee’s private use of a taxi, panel van or utility designed to carry less than one tonne is exempt from FBT if its private use is limited to:

    • travel between home and work
    • incidental travel in the course of performing employment-related travel
    • non-work-related use that is minor, infrequent and irregular (such as occasional use of the vehicle to remove domestic rubbish).

    See also:

    Other benefits relating to the use of a car

    Other benefits relating to the use of a car, while not a car fringe benefit, may instead be an expense payment or residual fringe benefit. For example, if an employer:

    See also:

    Next steps:

    Last modified: 29 Mar 2019QC 43853