As part of Yan's salary package, she parked her car in her employer's business premises for $4 per day during the FBT year ending 31 March 2020. Yan worked 225 days during this FBT year. The lowest fee charged by the commercial car park that is located within one km of Yan's company premises was $14 on 1 April 2019 and $18 on 31 March 2020.
What is the taxable value if the company elects to use the average cost method?

Question

Quizplus · Accepted Answer

The taxable value using the average cost method is calculated by taking the average of the lowest fee charged by the commercial car park at the start and end of the FBT year ($14 on 1 April 2019 and $18 on 31 March 2020), which is ($14 + $18) / 2 = $16 per day. Then, multiply this average daily cost by the number of days Yan worked during the FBT year (225 days). So, the taxable value is $16 * 225 = $3,600. However, since Yan paid $4 per day for parking, the actual benefit is the difference between the average commercial rate and what Yan paid: ($16 - $4) * 225 = $12 * 225 = $2,700.

As Part of Yan's Salary Package, She Parked Her Car