Question

Perisher Pty Ltd (Perisher) is a Ski equipment manufacturer that operates around Mt Hotham in Victoria. On 1 May 2019, Perisher provided Nikita (one of its employees) with a car as Nikita does a lot of traveling for work purposes. However, Nikita’s usage of the car is not restricted to work only. Perisher purchased the car on that date for $44,000 (including GST) plus $2,000 (including GST) dealer delivery charges. For the period of 1 May 2019 to 31 March 2020, Nikita traveled 12,000 kilometers in the car and incurred expenses of $770 on minor repairs that have been reimbursed by Perisher. The car was not used for 10 days when Nikita was interstate and was parked at the airport and for another five days when the car was scheduled for annual repairs.

Answer 1

SOLUTION

Employer pays fringe benefit taxes in case he provides extra benefits to his employees in case employer is providing extra benefit to employees .

Car total value =$ 44000+2000+ $ 46,000

Number of days service that is provided to the employee by his employer is from 1st may 2019 to 31 March 2020. = 304 days .

Fringe tax rate shall be  --30%

Hence the fringe tax payable is

30% of car total value*Number of days service that is provided to the employee by his employer /number of days in year - expenses

Fringe tax rate shall be  --30%

30% of $46,000 * (304\365) - $770

= 13800*[304/365] - 770 = $10, 723.69

= $ 10,723.70 (approx)

NOTE - PLEASE UPVOTE IT SHALL BE A GREAT FAVOR THANKS