An employer purchases a car on 1 May 2019 for $33,000 and provides that car to an employee to use for private purposes for the rest of the FBT year. A log book was maintained by the employee, which showed their work related use of the motor car to be 30%. If the employee reimbursed the employer $3,000 for using this car and the total operating costs for this car (including any deemed depreciation and interest) were $16,000, what would be the taxable value of this car fringe benefit provided under the operating costs method?

Question

Quizplus · Accepted Answer

The taxable value under the operating cost method is calculated by taking the total operating costs of the car ($16,000), multiplying by the percentage of private use (100% - 30% = 70%), and then subtracting any employee contributions ($3,000). This results in a taxable value of $8,200 ($16,000 * 70% - $3,000).

An Employer Purchases a Car on 1 May 2019 for $33,000