To assist the Employer in determining the Fringe Benefit Value of vehicles provided this FBT year, Autopia has attempted to obtain a Fringe Benefit Tax (FBT) declaration from each of your Employees on AutoPackage.
You should verify that you have collected either sufficient post-tax Employee Contributions to eliminate the Fringe Benefit Value and/or sufficient pre-tax FBT Allowance Contributions to cover the FBT value of each vehicle.
If you have been using post-tax Employee Contribution method:
1. Run a payroll report to determine the total post-tax Employee Contributions collected between the FBT year start date (column R) and the FBT year-end date (column T).
2. Ascertain whether the total Employee Contributions are equal to or more than the Fringe Benefit Value.
– If they are equal, you have successfully eliminated any Reportable Fringe Benefit on the vehicle and there is no FBT payable.
– If they are less than the Fringe Benefit Value you will either need to:
i. Make a one-off payroll adjustment to adjust the post-tax Employee Contributions retrospectively, effectively eliminating the Fringe Benefit liability and any resulting FBT on the car. (You can use our FBT Calculator 2019 to assist with this – Download here) Or
ii. Declare the resulting FBT liability on the vehicle in the company FBT return. FBT payable is calculated using the following formula:
(Gross Fringe Benefit Value – post-tax Employee Contributions for the FBT year) x 0.49 x 2.0802
Deduct the value of the FBT from the Employee’s pre-tax salary in the next available payroll (if possible).
If you have been using gross up/pre-tax FBT Allowance method:
1. Calculate the FBT liability on the vehicle using this formula –
(Gross Fringe Benefit Value – pre-tax FBT Allowance Contributions for the FBT year) x 0.49 x 2.0802
Include this vehicle in your FBT return. Employer will incur FBT on this vehicle.
2. Run a payroll report to determine the total pre-tax FBT Allowance Contributions collected between the FBT year start date (column R) and the FBT year-end date (column T).
– If the total pre-tax FBT Allowance Contributions collected is more than the FBT liability on the vehicle, you may choose to credit any surplus to the Employee pre-tax in the next payroll.
– If the total pre-tax FBT Allowance Contributions collected is less than the FBT liability on the vehicle, deduct the deficit amount from the Employee pre-tax in the next payroll.
Due to the timing of Employer’s payroll, Autopia’s invoice cycle, changing FBT statutory rates, days available in the FBT year and a range of other factors, Employee’s salary deductions will rarely exactly match the Fringe Benefit Value of the vehicle.
There is no concern for alarm here and any mismatch can be managed by following the instructions in Q2.
It is the Employer’s responsibility to communicate any salary adjustments to the Employee concerned. If Employees seek further clarification having spoken to Employer’s payroll, they can contact their personal Autopia consultant for further information.
Autopia is in regular contact with employees throughout the year, keeping them informed of their liabilities and trending.
31 March: Employees were sent an email instructing them to make a declaration for the 31 March. Once a declaration was received, it was forwarded to the employee for them to double check the values. Employees were also sent a SMS advising them it is imperative that they make a declaration.
4 April: A reminder email was sent to employees that had not yet completed the declaration.
6 April: Employees were sent an email and SMS instructing them the closing date for declarations was 10 April.
10 April: Autopia followed up employees who had not yet completed the declaration and took a telephone recorded declaration where possible.
Please refer to FAQ2.
You must lodge a FBT return if you have a FBT liability during a FBT year. Whilst your FBT liability in relation to novated leases may be zero, you may have other FBT liability obligations.
Your Fringe Benefit Report indicates whether we have obtained a declaration from your Employee (Column C – ‘Declaration completed’).
If we have been unable to obtain a declaration, Autopia has made an estimate as to the gross Fringe Benefit Value of the vehicle for the period. You may wish to obtain a declaration from that Employee so that we can update our records.
Only if the Employee is utilising the Operating Cost Method. Autopia does not hold Employee’s logbooks. If Operating Cost is identified on the FBT report, you will need to ensure that you hold the Employee’s logbook verifying their declared business use %.
For your information this is the declaration that an Employee makes –
I declare for the YEAR MAKE MODEL (registration: ABC123) that:
During the Employee’s initial consultation, prior to committing to the lease, the employee would have provided information on how they use their vehicle.
Based on this information, Autopia would have tailored the employee’s AutoPackage in the most tax effective way and Employees would have elected the optimum method at the time.
This method may have been overriden when the Employee made their FBT declaration if a more tax-effective FBT method was available based on their actual usage.
The Employee has made a statutory declaration that the vehicle was unavailable for private use. Autopia has not verified the legitimacy of claimed days unavailable as this is ultimately Employer’s responsibility.
In order to decide how many days to declare a vehicle unavailable, the Employee has been provided with the following instruction:
One of the factors in determining the extent of FBT liability is the number of days that the vehicle is made available for your use. Any days in the FBT year that the vehicle is not made available to you will reduce the FBT liability associated with the vehicle, examples as follows:
As a general rule, unavailability occurs when you or any associate (either your family or other staff) do not have use of the vehicle and the keys to the vehicle are in the control of your employer. In all cases unavailability commences from the first whole day that the vehicle was not available for use (midnight to midnight).
Days unavailable can only be claimed during the period in which the vehicle is held – in the case of a leased vehicle during the term of the lease. If the vehicle was sold during the year only include the period up to that date in your calculations.