Prior to the Amendments

Currently, any contribution an employer makes towards employee public transport costs generally classify as a fringe benefit. On the other hand, employer provided car parks are largely exempt from FBT under the exemption of on-premises benefits.

Proposed Amendments

The amendments propose to make public transport fares between an employee’s home and place of work that have been subsidised by an employer, exempt from FBT. The forms of transport which are excluded from FBT include bus, train, ferry tram or cable car.

Some employer subsidised use of public transport may fall under the employment income rules in S CE 1 rather than under the FBT rules. This is if an employer were to directly reimburse an employee in cash for their e.g., bus fare, the reimbursement is employment income. The amendment does not extend to cash reimbursement. If a public transport pass is provided, then this will constitute as a fringe benefit and qualify for the exemption.

Effective Date

The proposed amendments will be in effect for transportation benefits provided by employers after 1 April 2023.

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