Car Parking FBT

Small businesses and others are exempt from car parking FBT.

A car parking fringe benefit arises on a day when car parking is provided in respect of employment, and when all of the following conditions are met:

  • there is a commercial all day car park within a one kilometre radius of the business premises (measured by the shortest practicable direct route) that charges a representative fee of more than the threshold daily parking fee (see below)* at the beginning of the FBT year
  • the car is parked on any day for total periods of more than four hours between 7.00am and 7.00pm
  • the car is owned or leased by the employee/associate, or is provided for use by the employer
  • the car is used for travel between home and work by the employee at least once on that day
  • the car is parked at or in the vicinity of the primary place of employment.

COVID19 and Car Parking Benefits

Car park closures (both related office and nearby commercial car parks) due to COVID 19 circumstances generally mean that a car parking benefit cannot have been provided – see ATO commentary: COVID 19 and car parking benefits

Updated ruling on what is a commercial car park

Tax Ruling TR 2021/2 was issued 16 June 2021 with purpose of clarifying when the provision of car parking is a car parking benefit for the purposes of the Fringe Benefits Tax Assessment Act 1986.

The new ruling is an update and replacement of ruling Taxation Ruling TR 96/26 (previously withdrawn).

The ruling provides that following Federal Court and AAT decisions (Qantas Airways), the view is no longer held that car parking facilities with a primary purpose other than providing all-day parking (such as facilities which charge penalty rates significantly higher than rates chargeable for all-day parking at commercial all-day parking facilities) were not commercial parking stations.

Certain shopping centre paid car parks are now considered to be commercial parking stations.

This adjusted view takes effect from 1 April 2022.

There are several examples set out in the ruling.

See:The ATO expands the Range of Car Parking Fringe Benefits – BDO

*Threshold daily parking fees

Car parking daily fee thresholds are adjusted annually in line with movements in the All Groups Consumer Price Index. Threshold daily parking fees by FBT year ending on 31 March:

Year ending
31 March:
ThresholdReference
2022$9.25index
2021$9.15 index
2020$8.95TD 2019/9
2019$8.83TD 2018/7
2018$8.66TD 2017/14
2017$8.48TD 2016/7
2016$8.37TD 2015/11
2015$8.26TD 2014/11
2014$8.03TD 2013/9
2013$7.83 
2012$7.71TD 2011/14
2011$7.46 

How to calculate car parking fringe benefits

Car Parking Fringe Benefits Calculation Methods

  • Each day’s parking for each person for more than 4 hours (in total) within the hours of 7.00 am and 7.00 pm is a benefit.
  • There are a number of ways to determine taxable value of each benefit.
  • Each year, you can choose the best method according to the tax effect, and the supporting records available.

There are five (5) possible valuation methods for car parking fringe benefits:

Commercial Car Parking Station method

The value of the benefit is calculated using the lowest all day parking fee of a commercial parking station within 1 km of the employer’s business premises – multiplied by the number of benefits provided during the year. Each day’s parking for each person for more than 4 hours (in total) represents a benefit.

Market Value method

The market value method utilises the reported value of the car parking spaces as determined by an arms length qualified valuer. The taxable value for FBT is calculated by multiplying the arms length value by the number of benefits in the FBT year.

The Tax Office requires that unless detailed records are kept of all benefits provided, it will be assumed that a car parking fringe benefit arose on each business day of the year for all the available car parking spaces.

Average Cost method

The average cost method calculates the average of the lowest all day parking fees charged by any commercial parking station within 1 km of the employer’s business premises on the first and last day of the FBT year.

Statutory Formula method

The statutory formula assumes that each car parking space provided to an employee will be used on 228 days during the FBT year and that the daily rate for each benefit can be calculated using

  • the commercial parking station method
  • the market value method or
  • the average cost method

The formula: Benefit value of each space = Daily rate x [days provided ÷ 366] x 228

Where the number of spaces is greater than the number of employees, the value resulting from the formula is apportioned to the average number of employees.

Note: If the actual days a space is available is less than 228 days, then the statutory formula could result in a higher FBT valuation than alternative calculation methods. Parking space actual available days will be reduced by public holidays, sick days, rostered days off or when an employee is travelling for business purposes.

  • An employer election is required which specifies the number of employees, or the class of employees to be covered by this method
  • Contributions by employees covered by the election are subtracted from statutory formula result.

12 Week Register method

The register must include the following details:

  • the date on which each car was parked
  • whether the car was parked for a total time exceeding four hours
  • whether the car travelled between the place of residence of an employee covered by the election and their primary place of employment on that day
  • the place where the car was parked.

This method requires that a record of the actual number of car parking fringe benefits be kept for a continuous period of 12 weeks, which may also be used as a basis for future years unless the number of car spaces (or number of employees if less than the number of spaces) increases by more than 10%.

The total value of benefits for the 12-week period is multiplied to calculate a total for the period the benefits were available during the FBT year. The FBT year is always assumed to have 366 days.

The daily rate for each benefit can be calculated using

  • the commercial parking station method
  • the market value method or
  • the average cost method

The formula for 12 week register method:

  • Step 1 – determine total value of benefits in the 12 week period according to one of the commercial parking station, market value or average cost methods
  • Step 2 – annualise the 12 week total value by multiplying x 52 ÷ 12
  • Step 3 – if applicable, apportion the annualised result to the number of days the benefits were provided by multiplying x No. of days ÷ 366

Car Parking FBT Exemptions For Small Businesses and Others

An employer’s car parking benefits are exempt if:

  • the employer is a Small Business Entity, or total gross income before deductions was less than $10 million (raised to $50 million from 1 April 2021) for the immediately previous FBT year. (Newly commenced businesses may rely on a reasonable estimate).
  • the parking is not provided in a commercial car park; and
  • the small business is not a government body or a listed public company or subsidiary.
  • Exempt organisations – certain non-profits – scientific, religious, charitable, educational institutions, where car parking is provided free on the employer’s business premises or where the employee’s costs are paid or reimbursed. See Exempt benefits – motor vehicle parking and FBT concessions and endorsement
  • Disabled car parking – Car parking is exempt from FBT if the disabled employee is legally entitled to use a disabled person’s parking space and has a valid disabled person’s car parking permit displayed on the car. See – Parking for the disabled and exempt employers.

Objections

Further information:

This page was last modified 2021-07-19