Class Ruling CR 2025/68

What this ruling is about: 1. This Ruling sets out the fringe benefits tax (FBT) consequences of employers providing their employees with the use of an electric bicycle (e-bike) under a salary packaging arrangement with The Trustee for Cookson Family Trust trading as Flexabike. 2. Details of this scheme are set out in paragraphs 13 to 22 of this Ruling. 3. All legislative references in this Ruling are to the Fringe Benefits Tax Assessment Act 1986 (FBTAA), unless otherwise indicated. Note: by issuing this Ruling, the ATO is not endorsing this product. Potential purchasers or users must form their own view about the product. Who this Ruling applies to 4. This Ruling applies to you if you are an employer who provides an e-bike to an employee by way of a salary packaging arrangement with Flexabike. 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the scheme outlined in paragraphs 13 to 22 of this Ruling. Note: Division 230 will not apply to individuals unless they have made an election for it to apply. When this Ruling applies 6. This Ruling applies from 1 April 2024 to 31 March 2030. 7. A car benefit as described in section 7 will not arise from an employee's use of an e-bike as the e-bike is not a car. 8. An expense payment benefit as described in section 20 will not arise from the employee's use of an e-bike under the arrangement as the employer is legally liable for the lease payments, not the employee. 9. A property benefit as described in section 40 will not arise from the employee's use of an e-bike under the arrangement as Flexabike retains ownership of the e-bike during the terms of the lease agreement. 10. A residual benefit as described in section 45 will arise from the employee's use of an e-bike. 11. The residual benefit that arises from an employee's use of an e-bike will be an exempt benefit under subsection 47(6) if the private use of the e-bike is restricted to: 12. Where a residual fringe benefit arises from an employee's use of an e-bike, the taxable value of the fringe benefit can be calculated using either: 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. Electric bicycles 14. The e-bikes are purchased from manufacturers or Australian importers by Flexabike. 15. The e-bike consists of a bicycle frame fitted with an electric motor. The e-bike's motor provides support when the rider is actively pedalling as per European Standard EN15194 Cycles - Electrically power assisted cycles - EPAC Bicycles. 16. The e-bike's motor is powered by a light lithium-based battery through an electronic speed controller. 17. No registration or drivers licence is required to ride an e-bike. 18. Every e-bike is equipped with an odometer. Lease agreement and deed of novation 19. Under the scheme, the employee enters into a Lease Agreement with Flexabike, who provide the e-bike to the employee. 20. A Deed of Novation is entered into between Flexabike, the employee and the employer, which transfers the liability for the lease payment from the employee to the employer, for the term of the employee's paid employment. 21. Under the Lease Agreement terms and conditions and Deed of Novation: Use of the electric bicycles 22. Under the Lease Agreement, the predominant use of the e-bike will be for the purpose of commuting to and from, or between the employee's workplace. Commissioner of Taxation 1 October 2025 Will a car benefit arise from an employee's use of an electric bicycle? 23. Section 7 describes the circumstances in which a car benefit will arise. Paragraph 7(1)(a) states: 24. For this section to apply, the vehicle must be a car. 25. The definition of 'car' in subsection 136(1) provides that the term has the meaning given by subsection 995-1(1) of the ITAA 1997. 26. Subsection 995-1(1) of the ITAA 1997 defines 'car' as '... a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers'. 27. The term 'motor cycle' is not defined in the FBTAA or the ITAA 1997. It therefore takes its ordinary meaning. The Macquarie Dictionary defines 'motorcycle' as a 'motor vehicle resembling a bicycle, for one or two riders, sometimes with a sidecar attached'. [1] 28. 'Motor vehicle' is defined in subsection 995-1(1) of the ITAA 1997 to mean 'any motor-powered road vehicle (including a 4 wheel drive vehicle)'. 29. The e-bike consists of a bicycle-like frame with an electric motor. It is therefore a motor vehicle as it is powered by an electric motor. Although it is powered by an electric motor, rather than a motor powered by petrol, the type of motor does not affect the classification of the vehicle. It is a bicycle powered by a motor. Therefore, it is considered to be a motor cycle. 30. As the e-bike is a motor cycle, it is excluded from being a car by the definition in subsection 995-1(1) of the ITAA 1997. 31. Therefore, as the e-bike is not a car, a car benefit will not arise from the employee's use of the e-bike. Will an expense payment benefit arise from an employee's use of an electric bicycle? 32. Section 20 provides that an 'expense payment benefit' will arise: 33. Under the scheme, the lease payment is not an expense payment benefit as the employer is under a legal obligation, pursuant to the Deed of Novation, to pay the lease payments to Flexabike. The employer is not paying the lease payments on behalf of the employee. Will a property benefit arise from an employee's use of an electric bicycle? 34. Section 40 provides that a property benefit will arise: 35. Under the scheme, during the term of the lease, Flexabike retains ownership of the e-bike. Therefore, a property benefit will not arise from an employee's use of an e-bike. Will a residual benefit arise from an employee's use of an electric bicycle? 36. Section 45 provides that a benefit will be a residual benefit '... if the benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive)'. 37. Subsection 136(1) defines 'benefit' to include: 38. The right to use an e-bike comes within this definition. As it is not a benefit covered by a provision of Subdivision A of Divisions 2 to 11, it will be a residual benefit. 39. Support for this conclusion is provided by Miscellaneous Taxation Ruling MT 2034 Fringe benefits tax: private use of motor vehicles other than cars. In detailing the circumstances in which the use of a vehicle other than a car will give rise to a FBT liability, and providing guidelines for the determination of the value of that benefit, MT 2034 provides rates that can be applied to the use of a motor cycle. 40. Further confirmation that a residual benefit will arise from an employee's use of an e-bike pursuant to section 45 comes from Taxation Ruling TR 1999/15 Income tax and fringe benefits tax: taxation consequences of certain motor vehicle lease novation arrangements. Paragraph 21 of TR 1999/15 provides that in '... partial novations a residual benefit may arise under the FBTAA where all that occurs is the transfer to the employer of the lease payment obligations of the employee'. 41. Paragraph 4 of TR 1999/15 defines a partial novation as: 42. Under the arrangement considered in this Ruling, the employer is responsible for the lease payments which give the employee the legal right to use the e-bike. A residual benefit therefore arises from the employee's use of the e-bike pursuant to section 45. Will the residual benefit that arises from an employee's use of an electric bicycle be an exempt benefit under subsection 47(6)? 43. In discussing the circumstances in which a fringe benefit will arise from the use of a motor vehicle that is not a car, paragraph 8 of MT 2034 refers to the exemption provided by subsection 47(6). Paragraph 8 of MT 2034 states: 44. In accordance with paragraph 8 of MT 2034, the residual benefit that arises from an employee's use of an e-bike will be an exempt benefit under subsection 47(6) if the private use of the e-bike is restricted to: Calculating the taxable value of a residual fringe benefit that arises from an employee's use of an electric bicycle 45. In general terms, the method used to determine the taxable value of a residential fringe benefit depends upon whether the employer or an associate of the employer carries on a business that consists of, or includes the provision of, identical or similar benefits principally to outsiders and whether the benefit is provided over a period. 46. Subsection 136(1) defines 'outsider' to mean a person who is not: 47. Under the scheme, the employer will only provide the use of an e-bike to an employee under a salary packaging arrangement. Therefore, the benefit is not provided principally to outsiders. 48. Under the subsection 149(1), a benefit is taken to be provided during a period if the benefit is provided during a period of more than one day. As an employee is provided with the use of an e-bike for a period of more than one day, the benefit is an external period residual fringe benefit. 49. Section 51 provides the following 3 methods for calculating the taxable value of an 'external period residual fringe benefit': 50. The overall benefit provided to the employee by the employer is the use of a fully maintained e-bike. As this is not purchased by the employer, the taxable value under paragraph 51(c) is the notional value of the recipient's current benefit reduced by the amount of the recipient's contribution (if any). 51. 'Notional value' is defined in subsection 136(1) as: 52. MT 2034 provides guidance on the valuation of motor vehicles other than cars. Two methods of valuation are allowed, namely: Operating cost method 53. The operating cost method used to calculate the residual fringe benefit that arises from the private use of a motor vehicle that is not a car described in paragraphs 12 and 13 of MT 2034. These paragraphs state: 54. For an e-bike, the operating costs include the leasing charges. The operating costs to the employer exclude: 55. If the e-bike is used for work-related purposes, the total of the operating costs may be reduced under section 52 according to the proportion of business kilometres to total kilometres travelled in the year. Cents per kilometre basis 56. Alternatively, if the e-bike is used extensively for business purposes with the result that the standing costs would be spread over a substantial number of annual kilometres, the taxable value can be determined by multiplying the number of private kilometres travelled during the year by cents per kilometre rate. 57. The relevant rate is updated each year in an annual taxation determination. For the FBT year commencing 1 April 2025, the rate is 20c per kilometre, as provided in Taxation Determination TD 2025/1 Fringe benefits tax: rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing 1 April 2025. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).

Class of entities or scheme: 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Electric bicycles: 14. The e-bikes are purchased from manufacturers or Australian importers by Flexabike. 15. The e-bike consists of a bicycle frame fitted with an electric motor. The e-bike's motor provides support when the rider is actively pedalling as per European Standard EN15194 Cycles - Electrically power assisted cycles - EPAC Bicycles. 16. The e-bike's motor is powered by a light lithium-based battery through an electronic speed controller. 17. No registration or drivers licence is required to ride an e-bike. 18. Every e-bike is equipped with an odometer. | Lease agreement and deed of novation: 19. Under the scheme, the employee enters into a Lease Agreement with Flexabike, who provide the e-bike to the employee. 20. A Deed of Novation is entered into between Flexabike, the employee and the employer, which transfers the liability for the lease payment from the employee to the employer, for the term of the employee's paid employment. 21. Under the Lease Agreement terms and conditions and Deed of Novation: | Use of the electric bicycles: 22. Under the Lease Agreement, the predominant use of the e-bike will be for the purpose of commuting to and from, or between the employee's workplace. Commissioner of Taxation 1 October 2025

Ruling: 1. This Ruling sets out the fringe benefits tax (FBT) consequences of employers providing their employees with the use of an electric bicycle (e-bike) under a salary packaging arrangement with The Trustee for Cookson Family Trust trading as Flexabike. 2. Details of this scheme are set out in paragraphs 13 to 22 of this Ruling. 3. All legislative references in this Ruling are to the Fringe Benefits Tax Assessment Act 1986 (FBTAA), unless otherwise indicated. Note: by issuing this Ruling, the ATO is not endorsing this product. Potential purchasers or users must form their own view about the product. | Who this Ruling applies to: 4. This Ruling applies to you if you are an employer who provides an e-bike to an employee by way of a salary packaging arrangement with Flexabike. 5. This Ruling does not apply to anyone who is subject to the taxation of financial arrangements rules in Division 230 of the Income Tax Assessment Act 1997 (ITAA 1997) in relation to the scheme outlined in paragraphs 13 to 22 of this Ruling. Note: Division 230 will not apply to individuals unless they have made an election for it to apply. | When this Ruling applies: 6. This Ruling applies from 1 April 2024 to 31 March 2030. 7. A car benefit as described in section 7 will not arise from an employee's use of an e-bike as the e-bike is not a car. 8. An expense payment benefit as described in section 20 will not arise from the employee's use of an e-bike under the arrangement as the employer is legally liable for the lease payments, not the employee. 9. A property benefit as described in section 40 will not arise from the employee's use of an e-bike under the arrangement as Flexabike retains ownership of the e-bike during the terms of the lease agreement. 10. A residual benefit as described in section 45 will arise from the employee's use of an e-bike. 11. The residual benefit that arises from an employee's use of an e-bike will be an exempt benefit under subsection 47(6) if the private use of the e-bike is restricted to: 12. Where a residual fringe benefit arises from an employee's use of an e-bike, the taxable value of the fringe benefit can be calculated using either: 13. The following description of the scheme is based on information provided by the applicant. If the scheme is not carried out as described, this Ruling cannot be relied upon. | Electric bicycles: 14. The e-bikes are purchased from manufacturers or Australian importers by Flexabike. 15. The e-bike consists of a bicycle frame fitted with an electric motor. The e-bike's motor provides support when the rider is actively pedalling as per European Standard EN15194 Cycles - Electrically power assisted cycles - EPAC Bicycles. 16. The e-bike's motor is powered by a light lithium-based battery through an electronic speed controller. 17. No registration or drivers licence is required to ride an e-bike. 18. Every e-bike is equipped with an odometer. | Lease agreement and deed of novation: 19. Under the scheme, the employee enters into a Lease Agreement with Flexabike, who provide the e-bike to the employee. 20. A Deed of Novation is entered into between Flexabike, the employee and the employer, which transfers the liability for the lease payment from the employee to the employer, for the term of the employee's paid employment. 21. Under the Lease Agreement terms and conditions and Deed of Novation: | Use of the electric bicycles: 22. Under the Lease Agreement, the predominant use of the e-bike will be for the purpose of commuting to and from, or between the employee's workplace. Commissioner of Taxation 1 October 2025 | Will a car benefit arise from an employee's use of an electric bicycle?: 23. Section 7 describes the circumstances in which a car benefit will arise. Paragraph 7(1)(a) states: 24. For this section to apply, the vehicle must be a car. 25. The definition of 'car' in subsection 136(1) provides that the term has the meaning given by subsection 995-1(1) of the ITAA 1997. 26. Subsection 995-1(1) of the ITAA 1997 defines 'car' as '... a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers'. 27. The term 'motor cycle' is not defined in the FBTAA or the ITAA 1997. It therefore takes its ordinary meaning. The Macquarie Dictionary defines 'motorcycle' as a 'motor vehicle resembling a bicycle, for one or two riders, sometimes with a sidecar attached'. [1] 28. 'Motor vehicle' is defined in subsection 995-1(1) of the ITAA 1997 to mean 'any motor-powered road vehicle (including a 4 wheel drive vehicle)'. 29. The e-bike consists of a bicycle-like frame with an electric motor. It is therefore a motor vehicle as it is powered by an electric motor. Although it is powered by an electric motor, rather than a motor powered by petrol, the type of motor does not affect the classification of the vehicle. It is a bicycle powered by a motor. Therefore, it is considered to be a motor cycle. 30. As the e-bike is a motor cycle, it is excluded from being a car by the definition in subsection 995-1(1) of the ITAA 1997. 31. Therefore, as the e-bike is not a car, a car benefit will not arise from the employee's use of the e-bike. | Will an expense payment benefit arise from an employee's use of an electric bicycle?: 32. Section 20 provides that an 'expense payment benefit' will arise: 33. Under the scheme, the lease payment is not an expense payment benefit as the employer is under a legal obligation, pursuant to the Deed of Novation, to pay the lease payments to Flexabike. The employer is not paying the lease payments on behalf of the employee. | Will a property benefit arise from an employee's use of an electric bicycle?: 34. Section 40 provides that a property benefit will arise: 35. Under the scheme, during the term of the lease, Flexabike retains ownership of the e-bike. Therefore, a property benefit will not arise from an employee's use of an e-bike. | Will a residual benefit arise from an employee's use of an electric bicycle?: 36. Section 45 provides that a benefit will be a residual benefit '... if the benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive)'. 37. Subsection 136(1) defines 'benefit' to include: 38. The right to use an e-bike comes within this definition. As it is not a benefit covered by a provision of Subdivision A of Divisions 2 to 11, it will be a residual benefit. 39. Support for this conclusion is provided by Miscellaneous Taxation Ruling MT 2034 Fringe benefits tax: private use of motor vehicles other than cars. In detailing the circumstances in which the use of a vehicle other than a car will give rise to a FBT liability, and providing guidelines for the determination of the value of that benefit, MT 2034 provides rates that can be applied to the use of a motor cycle. 40. Further confirmation that a residual benefit will arise from an employee's use of an e-bike pursuant to section 45 comes from Taxation Ruling TR 1999/15 Income tax and fringe benefits tax: taxation consequences of certain motor vehicle lease novation arrangements. Paragraph 21 of TR 1999/15 provides that in '... partial novations a residual benefit may arise under the FBTAA where all that occurs is the transfer to the employer of the lease payment obligations of the employee'. 41. Paragraph 4 of TR 1999/15 defines a partial novation as: 42. Under the arrangement considered in this Ruling, the employer is responsible for the lease payments which give the employee the legal right to use the e-bike. A residual benefit therefore arises from the employee's use of the e-bike pursuant to section 45. | Will the residual benefit that arises from an employee's use of an electric bicycle be an exempt benefit under subsection 47(6)?: 43. In discussing the circumstances in which a fringe benefit will arise from the use of a motor vehicle that is not a car, paragraph 8 of MT 2034 refers to the exemption provided by subsection 47(6). Paragraph 8 of MT 2034 states: 44. In accordance with paragraph 8 of MT 2034, the residual benefit that arises from an employee's use of an e-bike will be an exempt benefit under subsection 47(6) if the private use of the e-bike is restricted to: | Calculating the taxable value of a residual fringe benefit that arises from an employee's use of an electric bicycle: 45. In general terms, the method used to determine the taxable value of a residential fringe benefit depends upon whether the employer or an associate of the employer carries on a business that consists of, or includes the provision of, identical or similar benefits principally to outsiders and whether the benefit is provided over a period. 46. Subsection 136(1) defines 'outsider' to mean a person who is not: 47. Under the scheme, the employer will only provide the use of an e-bike to an employee under a salary packaging arrangement. Therefore, the benefit is not provided principally to outsiders. 48. Under the subsection 149(1), a benefit is taken to be provided during a period if the benefit is provided during a period of more than one day. As an employee is provided with the use of an e-bike for a period of more than one day, the benefit is an external period residual fringe benefit. 49. Section 51 provides the following 3 methods for calculating the taxable value of an 'external period residual fringe benefit': 50. The overall benefit provided to the employee by the employer is the use of a fully maintained e-bike. As this is not purchased by the employer, the taxable value under paragraph 51(c) is the notional value of the recipient's current benefit reduced by the amount of the recipient's contribution (if any). 51. 'Notional value' is defined in subsection 136(1) as: 52. MT 2034 provides guidance on the valuation of motor vehicles other than cars. Two methods of valuation are allowed, namely: | Operating cost method: 53. The operating cost method used to calculate the residual fringe benefit that arises from the private use of a motor vehicle that is not a car described in paragraphs 12 and 13 of MT 2034. These paragraphs state: 54. For an e-bike, the operating costs include the leasing charges. The operating costs to the employer exclude: 55. If the e-bike is used for work-related purposes, the total of the operating costs may be reduced under section 52 according to the proportion of business kilometres to total kilometres travelled in the year. | Cents per kilometre basis: 56. Alternatively, if the e-bike is used extensively for business purposes with the result that the standing costs would be spread over a substantial number of annual kilometres, the taxable value can be determined by multiplying the number of private kilometres travelled during the year by cents per kilometre rate. 57. The relevant rate is updated each year in an annual taxation determination. For the FBT year commencing 1 April 2025, the rate is 20c per kilometre, as provided in Taxation Determination TD 2025/1 Fringe benefits tax: rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing 1 April 2025. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


Appendix: Will a car benefit arise from an employee's use of an electric bicycle?: 23. Section 7 describes the circumstances in which a car benefit will arise. Paragraph 7(1)(a) states: 24. For this section to apply, the vehicle must be a car. 25. The definition of 'car' in subsection 136(1) provides that the term has the meaning given by subsection 995-1(1) of the ITAA 1997. 26. Subsection 995-1(1) of the ITAA 1997 defines 'car' as '... a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers'. 27. The term 'motor cycle' is not defined in the FBTAA or the ITAA 1997. It therefore takes its ordinary meaning. The Macquarie Dictionary defines 'motorcycle' as a 'motor vehicle resembling a bicycle, for one or two riders, sometimes with a sidecar attached'. [1] 28. 'Motor vehicle' is defined in subsection 995-1(1) of the ITAA 1997 to mean 'any motor-powered road vehicle (including a 4 wheel drive vehicle)'. 29. The e-bike consists of a bicycle-like frame with an electric motor. It is therefore a motor vehicle as it is powered by an electric motor. Although it is powered by an electric motor, rather than a motor powered by petrol, the type of motor does not affect the classification of the vehicle. It is a bicycle powered by a motor. Therefore, it is considered to be a motor cycle. 30. As the e-bike is a motor cycle, it is excluded from being a car by the definition in subsection 995-1(1) of the ITAA 1997. 31. Therefore, as the e-bike is not a car, a car benefit will not arise from the employee's use of the e-bike. | Will an expense payment benefit arise from an employee's use of an electric bicycle?: 32. Section 20 provides that an 'expense payment benefit' will arise: 33. Under the scheme, the lease payment is not an expense payment benefit as the employer is under a legal obligation, pursuant to the Deed of Novation, to pay the lease payments to Flexabike. The employer is not paying the lease payments on behalf of the employee. | Will a property benefit arise from an employee's use of an electric bicycle?: 34. Section 40 provides that a property benefit will arise: 35. Under the scheme, during the term of the lease, Flexabike retains ownership of the e-bike. Therefore, a property benefit will not arise from an employee's use of an e-bike. | Will a residual benefit arise from an employee's use of an electric bicycle?: 36. Section 45 provides that a benefit will be a residual benefit '... if the benefit is not a benefit by virtue of a provision of Subdivision A of Divisions 2 to 11 (inclusive)'. 37. Subsection 136(1) defines 'benefit' to include: 38. The right to use an e-bike comes within this definition. As it is not a benefit covered by a provision of Subdivision A of Divisions 2 to 11, it will be a residual benefit. 39. Support for this conclusion is provided by Miscellaneous Taxation Ruling MT 2034 Fringe benefits tax: private use of motor vehicles other than cars. In detailing the circumstances in which the use of a vehicle other than a car will give rise to a FBT liability, and providing guidelines for the determination of the value of that benefit, MT 2034 provides rates that can be applied to the use of a motor cycle. 40. Further confirmation that a residual benefit will arise from an employee's use of an e-bike pursuant to section 45 comes from Taxation Ruling TR 1999/15 Income tax and fringe benefits tax: taxation consequences of certain motor vehicle lease novation arrangements. Paragraph 21 of TR 1999/15 provides that in '... partial novations a residual benefit may arise under the FBTAA where all that occurs is the transfer to the employer of the lease payment obligations of the employee'. 41. Paragraph 4 of TR 1999/15 defines a partial novation as: 42. Under the arrangement considered in this Ruling, the employer is responsible for the lease payments which give the employee the legal right to use the e-bike. A residual benefit therefore arises from the employee's use of the e-bike pursuant to section 45. | Will the residual benefit that arises from an employee's use of an electric bicycle be an exempt benefit under subsection 47(6)?: 43. In discussing the circumstances in which a fringe benefit will arise from the use of a motor vehicle that is not a car, paragraph 8 of MT 2034 refers to the exemption provided by subsection 47(6). Paragraph 8 of MT 2034 states: 44. In accordance with paragraph 8 of MT 2034, the residual benefit that arises from an employee's use of an e-bike will be an exempt benefit under subsection 47(6) if the private use of the e-bike is restricted to: | Calculating the taxable value of a residual fringe benefit that arises from an employee's use of an electric bicycle: 45. In general terms, the method used to determine the taxable value of a residential fringe benefit depends upon whether the employer or an associate of the employer carries on a business that consists of, or includes the provision of, identical or similar benefits principally to outsiders and whether the benefit is provided over a period. 46. Subsection 136(1) defines 'outsider' to mean a person who is not: 47. Under the scheme, the employer will only provide the use of an e-bike to an employee under a salary packaging arrangement. Therefore, the benefit is not provided principally to outsiders. 48. Under the subsection 149(1), a benefit is taken to be provided during a period if the benefit is provided during a period of more than one day. As an employee is provided with the use of an e-bike for a period of more than one day, the benefit is an external period residual fringe benefit. 49. Section 51 provides the following 3 methods for calculating the taxable value of an 'external period residual fringe benefit': 50. The overall benefit provided to the employee by the employer is the use of a fully maintained e-bike. As this is not purchased by the employer, the taxable value under paragraph 51(c) is the notional value of the recipient's current benefit reduced by the amount of the recipient's contribution (if any). 51. 'Notional value' is defined in subsection 136(1) as: 52. MT 2034 provides guidance on the valuation of motor vehicles other than cars. Two methods of valuation are allowed, namely: | Operating cost method: 53. The operating cost method used to calculate the residual fringe benefit that arises from the private use of a motor vehicle that is not a car described in paragraphs 12 and 13 of MT 2034. These paragraphs state: 54. For an e-bike, the operating costs include the leasing charges. The operating costs to the employer exclude: 55. If the e-bike is used for work-related purposes, the total of the operating costs may be reduced under section 52 according to the proportion of business kilometres to total kilometres travelled in the year. | Cents per kilometre basis: 56. Alternatively, if the e-bike is used extensively for business purposes with the result that the standing costs would be spread over a substantial number of annual kilometres, the taxable value can be determined by multiplying the number of private kilometres travelled during the year by cents per kilometre rate. 57. The relevant rate is updated each year in an annual taxation determination. For the FBT year commencing 1 April 2025, the rate is 20c per kilometre, as provided in Taxation Determination TD 2025/1 Fringe benefits tax: rates to be applied on a cents per kilometre basis for calculating the taxable value of a fringe benefit arising from the private use of a motor vehicle other than a car for the fringe benefits tax year commencing 1 April 2025. © AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).


What this Ruling is about | If this Ruling applies to you, and you correctly rely on it, we will apply the law to you in the way set out in this Ruling. That is, you will not pay any more tax or penalties or interest in respect of the matters covered by this Ruling. | at any time on a day, in respect of the employment of an employee, a car held by a person (in this subsection referred to as the provider ) … | the making of the payment referred to in paragraph (a), or the reimbursement referred to in paragraph (b), shall be taken to constitute the provision of a benefit by the provider to the recipient. | Where, at a particular time, a person (in this section referred to as the provider ) provides property to another person (in this section referred to as the recipient ), the provision of the property shall be taken to constitute a benefit provided by the provider to the recipient at that time. | … an industry expression that describes a novation (transfer) of a finance lease payment obligation. A partial novation may also occur where there exists both a finance lease and sub-lease. | A significant exemption from FBT is, however, provided under sub-section 47(6) of the Act. Under this sub-section, no liability for FBT will arise in respect of the provision of a vehicle to an employee where there is no private use of the vehicle by the employee or where private use of the vehicle by the employee during a year of tax is limited to certain work-related travel. Work related travel is defined in sub-section 136(1) of the Act to be travel between the employee's residence and place of employment or other place at which employment duties are performed and any travel that is incidental to travel in the course of performing duties of employment. It should be noted that in the event that private use is not so limited, FBT liability extends to all private use, including private home to work travel. | reduced by the amount of the recipients contribution insofar as it relates to the recipients current benefit. | … in relation to the prevision of property or another benefit to a person, means the amount that the person could reasonably be expected to have been required to pay to obtain the property or other benefit from the provider under an arm's length transaction. | 12. An alternative measure would be to look, broadly, to what would be the cost to the employee of providing his or her own vehicle of the same kind as that provided by the employer. However, rather than attempting a notional calculation of the cost to the employee of providing a similar vehicle, which becomes largely impracticable if different employees use the same vehicle over time, a more practical measure would be to look to the operating cost of the particular vehicle to the employer. Operating costs for these purposes would be as per component A of the car operating costs formula. As required by paragraph 10(3)(a), operating costs would thus include the cost of fuel, repairs and maintenance, registration and insurance and leasing charges (or depreciation and imputed interest, as appropriate). Any sales tax exemptions would, as for cars, be disregarded for these purposes. | 13. The gross taxable value determined on this basis would be reduced under section 52 of the Act, broadly, according to the proportion of business kilometres to total kilometres travelled in the year …


Related rulings: MT 2034 TD 2025/1 TR 1999/15
Legislative references: FBTAA Div 2 Subdiv A FBTAA 7 FBTAA 7(1)(a) FBTAA 10(3)(a) FBTAA Div 3 Subdiv A FBTAA Div 4 Subdiv A FBTAA Div 5 Subdiv A FBTAA 20 FBTAA Div 6 Subdiv A FBTAA Div 7 Subdiv A FBTAA Div 8 Subdiv A FBTAA Div 9 Subdiv A FBTAA Div 10 Subdiv A FBTAA Div 11 Subdiv A FBTAA 40 FBTAA 45 FBTAA 47(6) FBTAA 51 FBTAA 51(c) FBTAA 52 FBTAA 136(1) FBTAA 149(1) ITAA 1997 Div 230 ITAA 1997 995-1(1)
Other references: European Standard EN15194 Cycles - Electrically power assisted cycles - EPAC Bicycles Pan Macmillan Australia (2025) The Macquarie Dictionary online http://www.macquariedictionary.com.au