TravelSmart or travel tax free breaks: Is the fringe benefits tax a barrier to active commuting in Australia?

Abstract

The Fringe Benefits Tax (FBT) provides tax incentives to employers and employees who use private motor cars to travel to and from work. However there is no broad exemption available to employers that support employees choosing alternative modes of commuting. In this paper we explore schemes that some employers are currently implementing to promote active commuting, and how FBT applies to those schemes. We find that employers are frequently implementing arrangements without adequate awareness of potential FBT liabilities. We argue that the current patchwork of exemptions is inadequate and that broad exemptions are required to support commuters who choose active travel alternatives.