Company car, three ways, priced.

Two methods, and the employer may use whichever gives the lower taxable value. The statutory formula takes 20% of the car's base value, regardless of how it is driven. The operating cost method takes the car's actual running costs - plus deemed depreciation at 25% and deemed interest at the benchmark rate when the company owns the car outright - and applies the private-use percentage from a logbook. The taxable value is then grossed up (2.0802 where the company claims GST credits) and taxed at 47%. That gross-up is why FBT feels so expensive: it reconstructs the pre-tax salary a top-rate employee would have needed to buy the same benefit, so a $14,000 taxable value becomes roughly $13,700 of tax.

Battery electric vehicles first held and used from 1 July 2022 are exempt, provided the car has never been subject to luxury car tax above the fuel-efficient threshold - $91,661 for 2026-27. The exemption does not phase out: over the line means no exemption at all. But the line is tested on the car's value for luxury car tax, which excludes registration, CTP and stamp duty - so a drive-away price a little over $91,661 can still be exempt underneath, and near the line the contract price is the number to check. Plug-in hybrids only qualify under arrangements locked in before 1 April 2025. And the exemption removes the tax, not the reporting: the grossed-up value still lands on your income statement as a reportable fringe benefit, where it counts toward the Medicare levy surcharge, study loan repayments and Division 293.

A vehicle designed to carry one tonne or more is not a car in tax law, which changes everything - but check the compliance plate first, because payload varies by variant and many RAM 1500s and dual-cabs are under a tonne. Private use of an over-tonne vehicle can be exempt from FBT while that use is genuinely limited to travel between home and work plus private use that is minor, infrequent and irregular. The ATO's guideline puts numbers on that: no more than 1,000 km of private travel a year with no single return trip over 200 km, and they do audit it. A ute under one tonne that is not principally designed for carrying passengers can reach the same exemption as a car - with the car limit and cents-per-km still applying - which is exactly the sort of split worth a phone call rather than a guess. If the vehicle fails the test it becomes a residual benefit with no statutory formula to fall back on: adviser territory, not calculator territory.

At the top marginal rate it is close to a wash by design - the 47% FBT rate exists precisely so a fringe benefit cannot beat salary for a top-rate earner. Below the top rate, the contribution usually wins: you pay the taxable value to the company from after-tax money (funded, for an owner, by franked dividends), the taxable value drops to nil, and the FBT disappears - along with the reportable fringe benefit that would otherwise sit on your income statement. The contribution is assessable income to the company and carries GST, and the dividends must actually be declared and paid - drawing the cash and leaving it on a loan account is Division 7A territory, which is the single most common way this strategy goes wrong in practice.

When the business use is negligible. A personally-owned car creates no FBT at all, and the cents-per-kilometre method lets you claim your business kilometres - capped at 5,000 km a year, at 91 cents for 2026-27 - with no logbook and no receipts, since the rate covers all car costs including depreciation. The company pays you extra salary to cover the car instead; the salary is deductible to the company (and attracts super guarantee), and this calculator prices exactly that trade. The catch going the other way: personally you get no GST credits on the car or its running costs, which is a real advantage company ownership keeps.

The statutory formula needs no records and charges 20% of the car's value however you drive it, so it wins whenever business use is low - which is most company cars that double as the family car. The logbook (operating cost) method wins once business use is high: the taxable value is only the private share of the running costs plus deemed charges. For an owned car the crossover typically sits around 40-60% business use - on this calculator's default car it is 57% - and past it the difference grows fast. A logbook must cover 12 continuous representative weeks and lasts five years, and 'genuine' matters: a logbook that shows the pattern the audit disproves is worse than no logbook.