The ATO has recently issued a Class Ruling confirming that home to work travel using an employer provided E-Bike is tax-free.
Normally any benefits that are provided to employees by an employer are subject to Fringe Benefits Tax (FBT) (at 47% tax). However, a specific exemption in the FBT legislation allows home to work travel using a ‘non-car motor vehicle’ to be FBT free.
An E-Bike is a bicycle powered by an electric motor, so it is regarded as a motor vehicle and is able to avail the exemption.
With cycling and E-bikes gaining popularity during recent years and certainly during the Covid-19 pandemic, salary packaging an E-bike might become the next salary packaging craze.
Salary packaging cars has long been popular because of the concessional FBT treatment and the Government has often been questioned why more environmentally friendly forms of home to work travel are not afforded a tax exemption.
A number of years ago an ATO Class Ruling allowed certain home to work bus travel to be FBT-free, but this was limited in its application.
If the Government is serious in its commitment to reducing carbon emissions, encouraging the use of environmentally friendly home to work travel by providing FBT exemptions or concessions is a step in the right direction.
As always, the devil is in the detail, so please contact your Mazars advisor for advice about salary packaging and FBT, or speak to one of our tax specialists on:
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of the Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Mazars and the source of the publication are duly mentioned. In all cases, Mazars’ intellectual property rights are protected and the Mazars Group shall not be liable for any use of this publication by third parties, either with or without Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.