An employer purchases a car on 1 October 2019 for $35,000 and provides that car to an employee to use for private purposes for the rest of the FBT year. If the employee reimbursed the employer $2,000 for using this car, what would be the taxable value of this car fringe benefit provided under the statutory formula method?

Question

Quizplus · Accepted Answer

The statutory formula method calculates the taxable value as 20% of the car's base value minus any employee contributions. Here, 20% of $35,000 is $7,000. After subtracting the $2,000 reimbursement, the taxable value is $5,000.

An Employer Purchases a Car on 1 October 2019 for $35,000