Croweater

My Aussie employer has offered me a company car (inclusive of fuel and maintenance) OR a $15000 a year car allowance.

Which one is the best option ???

Do I pay tax on the company car ???? and can I claim tax back against the car allowance.

Please, Please, if anyone knows the score or has made a similar decision, let me know.

Thanks

jayr

I suggest getting financial advice on this. I suspect that the $15,000 allowance will be subject to your marginal income tax rate and that there will be Fringe Benefits Tax associated with the company car. This is fairly complex stuff and requires a good knowledge of the tax system.

BullcreekBob

G'day

Getting correct financial advice is a good call.

The allowance will probably be taxable and a rebate can probably be claimed on all business use of the car. The ATO used to publish a set of amounts that could be claimed per kilometre of business use. The amount / kilometre varied according to engine size.

So I guess what you should estimate before seeing the accountant is

1) car running costs inc insurance, servicing, petrol etc per year
2) likely distance travelled for business use and distance as "private" use

Talking to other folks at the same employer may help by finding out what option they chose and why.

Finally, it's probable that any FBT if payable, would be payable by the employer not the OP.

jayr

Legally the employer is resposnible to the ATO for paying FBT, almost alwasy in practice the employer will then take that payment from the employee's wages