The comments below are of a general nature. Your employer's policy may differ. Please check with your employer and Advantage (firstname.lastname@example.org) in relation to your specific circumstances.
If you have private use of an employer provided vehicle (eg. you garage the car at home overnight), this is a 'fringe benefit' according to the Tax Office. As there is a limit to your salary package amount, most employers require your salary packaging of expenses to be reduced to reflect the tax value of the car. In this way, Fringe Benefits Tax (FBT) should not be payable.
The tax value of the car is typically calculated using a formula provided by the Tax Office. In most instances, the value is calculated as 20% of the cost of the vehicle.
For example, a $30,000 vehicle will have a tax value of $6,000 ($30,000 x 20%). Normally your salary packaging of expenses will be reduced by this value ($6,000 in our example). In broad terms, if you can salary package $15,900, this amount will need to be reduced by the tax value of the car ($6,000). Approximately $10,000 of expenses will now be allowed to be salary packaged.
Advantage will calculate your salary package amount with the assistance of your employer. With full and timely information, no FBT should be payable.
It is important we have correct and timely car information. Therefore, please contact us if:
Novated car leasing is where you finance the family car using a lease. This may be a more cost effective solution than a car loan or paying cash for a car. You can lease a new or second hand car.
Please check with your employer if a novated car lease is an option. If yes, and you would like more information, contact Smartleasing.
If you need help, please contact us.