An FBT liability in relation to novated leases can occur for several reasons. The most common reasons are:
Statewide will work with employees and salary packaging administration service providers to ensure that all FBT liability risk is considered.
The statutory formula method is the only method allowed in the Queensland Government to calculate the taxable value of the novated lease vehicle.
|Taxable value =||(A x B x C) - E|
If the taxable value is more than $0, then a calculation for FBT liability is required. Employees may choose to contribute post-tax contributions or not seek reimbursement for eligible paid car expenses to reduce the taxable value to nil.
To work out the FBT liability, the formula is:
Fringe benefits tax liability = Taxable value x Type 1 Gross up rate (currently 2.1463) x FBT rate (currently 49%)
If an FBT liability occurs, the FBT liability will be automatically deducted from the employee's account with Statewide and remitted to the Administration Service Provider. If there are insufficient funds in the account, an invoice for payment will be sent directly to the employee.