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Letting employees use a work vehicle for personal trips may seem like a straightforward perk, but it can also create a fringe benefits tax (FBT) liability.
According to the Australian Taxation Office, FBT generally applies whenever a vehicle is made available for private use – even if it’s not actually used. Private use covers a wide range of activities, from school drop-offs and grocery runs to camping trips and transporting family. Even parking the car at home overnight, for security reasons, may be considered private use.
Exemptions can apply depending on the vehicle type and how it’s used, but accurate records are essential to demonstrate eligibility.
Employers need to check whether exemptions apply, keep logbooks or odometer readings, calculate taxable values, and ensure FBT returns are lodged and paid on time. Staying on top of these rules helps businesses remain compliant and avoid penalties while still offering employees valuable non-cash benefits.
#accountant #tax #business
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