Ah, the dreaded Fringe Benefits Tax (FBT) on cars – a joy for accountants and a headache for everyone else. In Australia, FBT is calculated based on the 'taxable value' of the car fringe benefit, which is typically determined using either the statutory formula method or the operating cost method. The statutory formula method is the popular choice and applies a flat percentage to the car's base value (usually its cost price), regardless of how much you actually drive it.
For example, the statutory rate is generally 20% of the car's base value, multiplied by the number of days the car was available for private use. Then, this amount is grossed up by the FBT rate (currently 47%) to get the taxable value. The operating cost method, by contrast, totals all car expenses and then apportions them based on business versus private use – more accurate, but a paperwork nightmare.
In short, the ATO loves complexity, so be sure to check the official guidelines or have your accountant on speed dial. For a quick glance, sites like ServiceCentral can help you get a grip on your FBT obligations.
LightingListing your ad only takes a few minutes, and most categories are free.
Post an adA weekly hand-picked round-up of the best bargains, free stuff, and trending listings. No spam, unsubscribe anytime.
Know someone looking to buy or sell something? Send them to Tradingpost, Australia's original marketplace.
