Further Reading:
- About Tax Ruling 2021/2
- Exempt car parking or car parking not subject to FBT
- Fully taxable car parking
- Concessionally taxed car parking
- Trends in car parking benefits
Why pay more FBT than you have to?
The Average Cost Method is easily the most common valuation method for concessionally taxed car parking. It is also the Method by which employers unknowingly (as is often the case), pay far more FBT than is required.
We illustrate below the significant savings employers can achieve using examples for 10, 20, 40 and 80 spaces, and average daily rates ranging from $18 down to $10. This potential reduction in average daily rates is indicative of what is achievable. A small reduction in the daily rate makes for a large FBT saving.
Avg. Daily Rate | No. of spaces | FBT Payable | Cumulative FBT Saving | No. of Spaces | FBT Payable | Cumulative FBT Saving |
$18 | 10 | $39,294 | 20 | $78,589 | ||
$14 | 10 | $30,562 | $8,732 | 20 | $61,124 | $17,464 |
$10 | 10 | $21,830 | $17,464 | 20 | $43,660 | $34,928 |
Saving per space | $1,746 | Saving per space | $1,746 |
Avg. Daily Rate | No. of spaces | FBT Payable | Cumulative FBT Saving | No. of Spaces | FBT Payable | Cumulative FBT Saving |
$18 | 40 | $157,177 | 80 | $314,354 | ||
$14 | 40 | $122,249 | $34,928 | 80 | $244,498 | $69,856 |
$10 | 40 | $87,321 | $69,856 | 80 | $174,641 | $139,713 |
Saving per space | $1,746 | Saving per space | $1,746 |
If you’ve got a sizeable FBT bill on your car parking or just think you’re paying way too much FBT on car parking – it’s time to take a closer look at the average daily rate and make sure that you’re not paying more FBT than required by the law.