The ATO indicates that the benefits generally fall within two categories:
- Expense payment fringe benefits (paying or reimbursing toll expenditure, such as paying an employee’s eTag or similar account); or
- Residual fringe benefits (such as allowing an employee to use an eTag owned by the business).
In terms of calculating the taxable value of the benefits provided, employers may use an actual method or alternatively may be able to apply a private use percentage which is established using a logbook or similar document to the total expenditure for a year.
The ATO confirms that the otherwise deductible rule can apply such that tolls incurred in relation to trips solely for business purposes should not be subject to FBT. The minor benefits exemption may also be available.
The ATO also accepts that any road toll benefits provided in connection with a vehicle that is exempt from FBT will not be subject to FBT, on the basis that exempt vehicles are generally provided for work travel of the employee and any private use is minor, infrequent and irregular.
It is important to ensure that these benefits are correctly reported as they do not appear to be treated as part of the operating costs of providing a car fringe benefit.