This value is taxed on the top marginal tax rate.
A statutory formula is prescribed for the payment of the FBT based on the value of the car and the distance travelled during the year irrespective of whether the vehicle was used for business or personal purposes. The lease payments or the running costs do not matter for the calculation of the FBT.
If the car is made available for the personal use of the employees only for a certain period of the year then the FBT payable is calculated on a proportionate basis with the employer paying the FBT for the period for which the vehicle was actually used by the employee for his/her personal use instead of the whole year.
Under this method the employee is allowed to reduce the FBT liability by making their own contributions towards the running expenses of the car. These contributions are to be deducted from their after tax salary. ...Show more