Driving less than 15,000 kms a year.
In the past, driving less than 15,000 kms a year was a real issue but now...
Now that the Australian tax rates have risen, so that the top tax bracket is over $180,000, paying your Fringe Benefit Tax out of your pretax does not make sense. The ATO statistics show that less than 2% of the Australian workforce is paying tax in the top bracket (46.5%).
How does paying your FBT post tax work?
Instead of your FBT being added onto you pretax deductions, (calculated below);
|Car Value||Annual kms||GST Claim
Notice the FBT rate is 46.5%, so, no matter how many kilometres a year you drive, pre tax FBT means that you are always paying the top marginal tax rate.
Post tax FBT uses only, Car value x Annual kms, while not using the 'GST gross-up' nor, the 'FBT tax rate'.
|Car Value||Annual kms||
End of day difference, same employee, same car and same annual kilometres, the post tax could put thousands more into the employees pocket.