FBT: Do you provide car parking for employees?

If you provide car parking for your employees, you may have to pay fringe benefits tax (FBT) on those benefits.

A car parking fringe benefit will generally arise if an employer provides car parking to an employee and various conditions are satisfied, including:

  • the car is parked at premises owned or leased by, or otherwise under the control of, the provider (usually the employer);
  • the car is parked for a total of more than 4 hours between 7am and 7pm on any day of the week;
  • the car is parked at or near the employee’s primary place of employment on that day;
  • the car is used by the employee to travel between home and work (or work and home) at least once on that day;
  • there is a commercial parking station that charges a fee for all-day parking within one kilometre of the premises on which the car is parked;
  • at the beginning of the FBT year (1 April 2021 for the current FBT year), the commercial parking station fee for all-day parking was more than the car parking threshold ($9.25 for the current FBT year) – provided the fee is not substantially greater or less than the average (over a 4-week period) of the lowest fee charged to members of the public for all-day parking.

A recent court case decided that Virgin Airlines did not have to pay FBT on car parking provided at airports to its flight and cabin crew, primarily because their primary place of employment was the aircraft they flew on – and clearly an employee’s car was not parked at or near the aircraft.


Car parking benefits are exempt from FBT where the benefits are provided:

  • by employers who meet the conditions of the small business car parking benefits exemption (see below);
  • by certain research, education, religious and charitable institutions; and
  • for employees with a disability (irrespective of the type of employer).

Small business car parking benefits exemption

The small business car parking benefits exemption applies if the following conditions are satisfied:

  • the parking is not provided in a commercial car park; and
  • for the last income year before the relevant FBT year, either the employer’s
  • gross total income was less than $10 million or their turnover was less than $10 million (less than $50 million for benefits provided on or after 1 April 2021).

This exemption is not available to government bodies, listed public companies, or subsidiaries of listed public companies.

Tip!  In 2019, the ATO changed its views on aspects of the car parking fringe benefits rules, especially in relation to what qualifies as a commercial car parking station. The changed views will not apply until 1 April 2022. But talk to your tax adviser before then if you provide car parking for employees.

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