Company car tax in Australia - What do I need to know?

[200bhp]

As per the subject, what do I need to know about company car tax down-under? How is it calculated? emissions or value or a mixture of the two?

In the UK, most sales reps drive around in a Mondeo, Insignia or Passat which those who have "made it" have a 3 series or Audi A4 S-Line. So what do people at different levels opt for down-under?

[Colonial]

A lot of business use cars are generally done as a novated lease, where the car + running costs are taken out of your pre-tax income and can be used as a tax minimisation strategy. I do this.

Unless you are given a car + fuel card as part of your salary package.

Then there is the third way in which you are pretty much given a car allowance.

Options 1 and 3 tend to mean you can pick your own vehicle within reason. Option 2 often has limitations. For example, when I was at the state government you couldn't get a V8 or 4WD as a company car, unless you could prove the need for a 4WD.

There is all kind of implications for Fringe Benefits Tax which are not particularly straightfoward. As usual, it is probably best to talk to an accountant.

ETA I do not provide company cars to staff. If a staff member is undertaking a lot of business trips it generally makes more sense for both them and the company to get a Novated Lease.

Edited by Colonial on Friday 15th June 00:49

[Pommygranite]

The main question is - how many business k's will you be doing? If less than 20k (I think) then you'll get hammered with tax. If you're just driving to work and back then you're stuffed. Business in Perth isn't that spread about so it can be tricky to get above 20k unless you're pretty much working mobile.

With regards to cars:

Standard- corolla - white
Slightly upper tier - Camry - white
Management - Falcodore - white
Director - Landcruiser - Gold.


Want a 3/A4/anything interesting - take the cash buy yourself

[200bhp]

Thanks chaps.

There will be very little business mileage involved.

The employer has suggested the idea of a car as a means of getting us mobile upon arrival - Simply to give us one less thing to sort out and remove the need to rent a car to go house hunting etc.

[Pommygranite]

Sounds like he's just helping out - dont worry about it and sounds like he wants to please you!

[Mattt]

EI thought the mileage brackets issue for FBT had been removed moved now?

[200bhp]

Thanks for the advice.

We're now looking to borrow a "spare" company vehicle upon arrival until we can buy something more permanent. As in the UK, the company car option just isnt' viable for an office based role.