Subsidised public transport for employees will soon be cheaper, thanks to the removal of fringe benefit tax (FBT).
From 1 April 2023, you will be able to support your employees to travel via public transport without needing to pay FBT.
What types of travel are included?
Subsidised fares are now exempt from FBT when you travel by:
- Buses
- Trains
- Ferries
- Trams
- Cable car
Note that this doesn’t include taxis or airfares.
Why has FBT been removed from public transport?
Car parks and work-related vehicles don’t attract FBT, but until now public transport has been subject to FBT. This creates a financial incentive toward driving, and disincentivises public transport as an employee perk. That’s a problem because the Government doesn’t want to promote high-emissions travel over low-emissions travel.
Now, though, removing FBT makes it more cost-effective for employers to provide passes and fares as job sweeteners. It also eliminates a compliance cost.
Could you take advantage of this change?
Thinking about whether subsidised fares could help your team? We can help you calculate the costs and benefits of public transport perks for your employees. Or do you have questions about the tax implications of work vehicles?
Get in touch, we’d love to hear from you.
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