Novated Bike Lease and FBT

The good news is – yes you can Novate a Motorcycle

Motorbikes are obviously not classed as a car under the FBT Act. They are classed as under “vehicle other than a car” and are therefore a residual fringe benefit as opposed to a car fringe benefit. If an employer provides you with a motorbike, they may be liable to pay fringe benefits tax. The FBT payable is based on either the operating cost method (like a car) or cents per kilometre method, which is actually 12c per km for motorbikes.

ATO ruling

The rates to be applied where the cents per kilometre basis is used for the fringe benefits tax (FBT) year commencing on 1 April 2007 are: Taxation Determination For Motorbikes

Calculating Motorbike FBT

Calculate Motorbike FBT

You will notice at the bottom of the page of the “Calculate Motorbike FBT” link, there is also an FBT exemption. A motorbike is FBT exempt if it is used for:

• travel between home and work
• travel that is incidental to travel in the course of duties of employment
• non-work-related use that is minor, infrequent and irregular

Note that if these specific guidelines for use are not followed that the exemption does not apply. Now, this opens up the possibility of being able to package a Motorbike without paying FBT.