Salary-sacrificed electric bicycles (e-bikes) may be FBT exempt

A recently released class ruling issued by the ATO has confirmed that the employees use of an e-bike can be FBT exempt in certain circumstances.

The arrangement involves a Novated Lease agreement where the bike company leases the bike to the employer for the term of the agreement. All costs of the lease are paid by the employer and then salary sacrificed by the employee.

Due to the fact an e-bike is not a "car" a car fringe benefit will not arise. A property fringe benefit does not arise as the ownership of the bike is retained by the bike company.

There is a requirement however, on how the e-bike is used in order to claim the exemption. The private use of the bike needs to be limited to:

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

Further details can be found on the ATO website. We cover this topic in detail within our Salary Packaging course and you can find out more about that course here.


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