There are two methods to calculate car fringe benefit
- Statutory method and
- Operating method
In general, operating method will give a better result of fringe benefit. To use operating method, a logbook must be kept obtaining business use percentage of the car.
Below are the requirements for a valid logbook:
- Logbooks must be kept for a continuous period of at least 12 weeks, every five years
- Logbooks must contain the following information in relation to all business trips:
- The odometer reading at the start and end of each journey
- The date on which each journey began and ended
- The kilometres travelled
- The purpose of each journey
- It must be kept in English
- Entries must be made in the logbook at the end of each journey or as soon as reasonably practicable thereafter
In addition to a logbook, an employer is also required to record the total number of kilometres travelled by a car during the FBT year.
Employers can elect to use the same logbook for the replacement car where they make the nomination in writing on or before the lodgement date of the FBT return and the nomination contains the following:
- The make, model and registration number of the original car; and
- The make, model and registration number of the replacement car
If you need any more information in relation to logbook or car fringe benefit, Adrians are here to help.
Our Smart Tech Accountant, Markus, has put together a brief video on what you should look out for when choosing a Motor Vehicle Mobile Application; which you can find here.