What is the Statutory Formula Method of calculating Fringe Benefits Tax (FBT), and how does it work?
The Statutory Formula Method is a common method of calculating Fringe Benefits Tax (FBT). Using this method, FBT is calculated in two steps. • The FBT Taxable Value is calculated as follows: FBT Taxable Value = FBT Capital Value* x Statutory Percentage** x (Number of days in the FBT year the vehicle is available for use / 365)*** * Vehicle price less on-road costs ** Determined by kilometres travelled Between 0 and 14,999km = 26% Between 15,000 and 24,999km = 20% Between 25,000 and 40,000km = 11% 40,001km and greater = 7% *** Full year availability assumed – 365 days • The FBT Liability is then determined using the FBT Taxable Value: FBT Liability = FBT Taxable Value x Gross Up Factor (2.0647) x FBT Rate (46.5%) As the kilometres travelled increases, the Statutory Percentage decreases – the more kilometres you travel, the less FBT you pay. If your Novated Lease begins or ends part-way through an FBT year, the Statutory Percentage is based on the kilometres you would’ve travelled if you
