See the net annual tax cost of holding a car in your business versus your own name — FBT, depreciation, GST and car-expense rules for the 2025–26 year.
The Car
$
Includes dealer delivery, GST and luxury car tax
$
Cash paid at acquisition (reduces financed amount)
days
years
4+ years reduces the statutory base value by ⅓
Electric vehicle (BEV / hydrogen)
FBT-exempt if ≤ $91,387. PHEVs excluded from 1 Apr 2025
Business is registered for GST
Type 1 gross-up 2.0802 if input credits apply, else 1.8868
Running Costs & Finance
$
Fuel, rego, insurance, servicing, repairs, tyres
$
Interest on the car loan (if financed)
$
Sets the marginal rate for the personal-name deduction
In the Business — FBT method
days
Days the car was kept at the premises and genuinely unavailable for private use
365 days = 365 − 0
Statutory taxable value scales by this ÷ 365
⚠ Audit trap: a car garaged at or near the employee's home is treated as available for private use — even just for security, and even if private use is banned. Days only reduce the count if the car is genuinely kept at the business premises (not the home) for the whole day, with keys/control surrendered. Keep a days-unavailable declaration.
%
FBT falls on the private share of total running costs (incl. deemed depreciation 25% and deemed interest 8.62%). The cost is not capped at the car limit for this method.
In Personal Name — how the owner claims
%
Home-to-work travel is private — this is usually lower than total business use.
km
Capped at 5,000 km per car. Rate: 88c/km (2025–26). Covers fuel, rego, insurance, servicing and depreciation — nothing else claimable.
Result — net annual tax position
On these numbers
—
—
In the Business ✓ cheaper
Running + interest (cash)—
FBT payable —
Deductions claimed—
Tax saving @ 25%—
Net annual cost
—
In Personal Name ✓ cheaper
Running + interest (cash)—
FBT payable$0
Deduction claimed —
Tax saving @ 39%—
Net annual cost
—
One-off & non-cash items not in the annual figure:
Reportable Fringe Benefits Amount on the business car can affect the owner's Div 293, HELP/HECS, Medicare levy surcharge and child support. Assumes the company has taxable income to absorb the deductions and a valid logbook supports the work-use %. Excludes stamp duty and the capital outlay (same either way).
Business FBT — method comparison
Statutory formula
—
FBT before contributions
Operating cost
—
at 70% business use
Employers elect the method per car each FBT year and may use whichever gives the lower taxable value. Operating cost usually wins once business use is above ~40–50%.