What methods are the basis for a car fringe benefit calculation?
The taxable value of a car fringe benefit may be calculated by either of the following methods: • Statutory formula method: The taxable value of the car fringe benefit is a percentage of the car’s value. This percentage varies with the total distance travelled by the car during the FBT year (regardless of whether or not it is private travel). The greater the distance travelled, the lower the taxable value. • Operating cost method: The taxable value of the car fringe benefit is a percentage of the total costs of operating the car during the FBT year. The percentage varies with the extent of actual private use. The lower the incidence of actual private use, the lower the taxable value. You will need to maintain a log book over a twelve week period to determine the private use percentage.
