E-bikes – the next salary packaging craze?

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 alternatively contact one of our tax specialists via phone or the form below. 

Brisbane – Jamie Towers

Melbourne- Evan Beissel

Sydney – Gaibrielle Cleary

+61 7 3218 3900

+61 3 9252 0800

+61 2 9922 1166

Published: 1/12/2020

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