What is the statutory method of FBT?
What is the statutory method of FBT?
The statutory FBT method is based on how much the vehicle costs rather than how much it is being used privately. It uses a flat rate of 20% of the car’s base value, taking into account the number of days per year the vehicle is available for private use.
What is the statutory formula method?
The Statutory Formula method applies a statutory fraction, currently 20% regardless of kilometres travelled, to the base value of a car to determine the FBT-taxable value of the car benefit. The statutory formula is based on: cost of motor vehicle. date of purchase. number of days of private use.
What are the two methods by which FBT is calculated for a car and which method will be used?
There are two calculation methods available to value a car fringe benefit – the Statutory Formula or the Operating Cost method.
What is included in the cost base of a motor vehicle for FBT?
If you’ve owned the car for less than 4 years when the FBT year began, the base value is the original cost price of the car, or ⅔ of the cost price if owned for more than 4 years.
What is FBT statutory rate?
The Statutory FBT method A flat rate of 20% of the car’s base value is used, which takes into account the number of days a year the vehicle is available for private use. Put simply, the base value is the car’s purchase price, less stamp duty and any registration costs incurred as part of the purchase.
Who pays FBT?
employer
Your employer is liable for any applicable FBT on fringe benefits they provide to you and/or your family. FBT is separate from income tax. It’s calculated on the taxable value of a fringe benefit. The taxable value is generally the cost to your employer of providing the benefit to you.
How is FBT operating cost calculated?
Operating Cost Method Taxable value is calculated as: Total Operating Expenses of the Vehicle x (100% – Business Use Percentage) – Contribution Collected. Operating Expenses – these are the total costs for the vehicle during the course of the FBT Year, including lease payments and all running costs.
How is FBT base value calculated?
Cost Base Value = total vehicle purchase price including GST less stamp duty, registration and compulsory third party (CTP) insurance. For re-financed lease vehicles: Cost Base Value = the value when the vehicle was originally provided by current employer as a benefit.
How is FBT calculated?
The calculation is: Taxable Value x Gross-Up Rate x FBT Rate. Taxable Value – the amount calculated using either Statutory Formula or Operating Cost.
What benefits are exempt from FBT?
Some benefits are exempt from FBT or receive concessional treatment….Fringe benefits tax – exemptions and concessions
- Work-related portable electronic devices exemption.
- Other work-related items exemption.
- Minor benefits exemption.
- Taxi travel expenses exemption.
- Small business car parking exemption.
- Concessions.
What is the current FBT rate?
47%
This information contains fringe benefits tax (FBT) rates and thresholds for the 2017–18 to 2021–22 FBT years. An FBT rate of 47% applies across these years. The FBT year runs from 1 April to 31 March.
What is FBT rate?
This information contains fringe benefits tax (FBT) rates and thresholds for the 2017–18 to 2021–22 FBT years. An FBT rate of 47% applies across these years. The FBT year runs from 1 April to 31 March. Certain rates and thresholds are referenced from the relevant taxation determination.
How does the statutory formula for FBT work?
How the Statutory Formula FBT method works The statutory FBT method is based on how much the vehicle costs rather than how much it is being used privately. It uses a flat rate of 20% of the car’s base value, taking into account the number of days per year the vehicle is available for private use.
How is the operating cost FBT method used?
The Operating Cost FBT method. The operating cost method is also commonly referred to as the ‘logbook method’ as it requires a business to use logbooks to record how much each vehicle is used for work purposes and how much for private use. A logbook needs to be maintained for a period of 12 consecutive weeks for each vehicle.
How to calculate the FBT rate for a vehicle?
FBT Formula. Vehicle Cost Base x Statutory Rate = Taxable Value (also known as “Benefit Value”) (Taxable Value – Post Tax Contributions) x Days Held/Days in FBT Year x FBT Rate 1 x Gross Up Factor 2 = FBT. 1 FBT Rate = 47%. 2 Gross Up Factor = 2.0802. For example: Vehicle Cost Base Value = $30,000. Estimated Annual Kilometres = 20,000 km per annum
Is the FBT rate too much for businesses?
Typically most businesses have used the statutory method to determine their FBT as it is easier to calculate and doesn’t rely on the onerous task of drivers keeping detailed logbooks. But with the gradual introduction of a flat FBT rate of 20% (in 2011) some businesses could unwittingly be paying too much.