Fringe Benefit Tax on Motor vehicles

Generally, fringe benefit tax is tax levied on employees’ possible or available use of a business asset for private purposes. This is common with motor vehicles. This is because use of business assets privately by an employee is considered a form of employee remuneration and accordingly should be taxed.

For the purposes of FBT the definition of employee includes their associated persons and shareholder employees. 

Set out below is quarterly formulas of FBT on a motor vehicle made available for the private use of an employee. 

1) Cost price option

Cost price (GST inclusive) X Number of available days / number of days in quarter X 5% 

2) Tax value option

Tax value (GST inclusive) X Number of available days / number of days in quarter X 9% 

Further assistance please feel free to contact us.

The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant.