Salary-sacrificed e-bike – No FBT Tax & promote good health in your business

e-bike pictureSalary sacrificing a “company car” is a common packaging option offered to employees.  However with more employees looking to pedal power to get to work, an electrically assisted bicycle (e-bike) can provide tax benefits also.

How does it work?

A car benefit as described in the FBT rules will only arise for a “car”.  It will not arise from an employee’s use of an e-bike simply because the e-bike is not a car. And a property fringe benefit will not arise from an employee’s use of an e-bike if the ownership of the bike is retained by the bike company which hires to the employer for the employee’s use.

The benefit falls within the “residual benefit” category – which is a “catch-all” for fringe benefits provided. The use of the e-bike however will be exempt as long as the private use is restricted to travel to and from work, its use is incidental to work duties, or there is minor and infrequent non-work use.

Therefore, there will be no FBT liability to the employer in providing e-bikes in this manner for employee use.

*An e-bike is defined of a bicycle-like frame fitted with an electric motor, which provides support when the rider is actively pedalling — the rider therefore is still getting exercise, but the effort is supported by battery power. As with unpowered bicycles, there is no requirement for registration or a drivers licence.

See also - ATO Class Ruling CR 2015/80

https://www.ato.gov.au/law/view/document?DocID=CLR/CR201580/NAT/ATO/00001&PiT=99991231235958

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