Employers providing car fringe benefits need to ensure they have the necessary records and documentation for the relevant Fringe Benefit Tax (FBT) year. An employer can calculate the taxable value of a car fringe benefit using one of two methods:

• The Statutory Formula Method 
• The Operating Cost Method

The Statutory Formula Method generally calculates the taxable value using 20%of the car’s base value, adjusted for the number of days the car was available for private use and reduced by any employee contribution.

The Operating Cost Method calculates the taxable value based on the car’s operating costs, reduced to reflect the business-use percentage of the vehicle and any employee contribution. 

An employer can choose between the two methods for each car for each FBT year, allowing the method that produces the more favourable outcome to be used. Both methods require appropriate odometer records. Where the Operating Cost Method is used, a logbook is generally required to establish the business-use percentage. 

The logbook should record:

• The start and end dates of the logbook period;
• The odometer readings at the start and end of the logbook period;
• The total kilometres travelled during the logbook period;
• Details of each business journey (including the date, start and finish times, odometer readings at the start and end, kilometres travelled; and the purpose of the journey)
• The business-use percentage for the logbook period