Stop Overpaying FBT on Car Parking
Car parking FBT is one of the most complex, misunderstood and commonly miscalculated items on an FBT return — and the mistakes are expensive.
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Most Australian employers are getting their car parking FBT wrong — paying more than the law requires, or exposing themselves to unnecessary audit risk. Paul Mather has spent 30+ years fixing exactly this problem.
ATO-compliant valuations for all types of Australian employers — from small businesses to large corporates, Not For Profits, Local, State and Federal Government organisations and Accounting Firms.
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Excellent FBT training experience with Paul Mather. Presentation, notes, and questions and answering sessions were fabulous.
Great presenter, and content – 10/10 for these two aspects.
Have questions about car parking FBT, compliance, or how we work? Here are answers to the most common queries.
A car parking benefit is taxable where your organisation provides a car parking space and there is a commercial parking station within 1 kilometre of your premises that charges more than the ATO’s car parking threshold as its lowest daily fee on the first day of the FBT year. For the 2026 FBT year, that threshold is $11.03 per day. If no commercial station within 1km charges above the threshold — or if there is no commercial station within 1km at all — there is no taxable benefit. Check out the 2026 FBT Car Parking Hotspots
The 1km distance is measured by the shortest practicable route — not as the crow flies. This distinction matters where roads, waterways, or other obstacles affect the actual practical walking distance between your premises and a nearby commercial car park.
There are three approved valuation methods: the Commercial Parking Station Method (using the lowest daily rate charged by a commercial station within 1km), the Average Cost Method (using the average of the lowest daily rates across multiple nearby stations), and the Market Valuation Method (using a formal market valuation). The Average Cost Method is the most commonly used and our reports provide the most favourable result — but the right choice depends on your specific location and circumstances.
In many cases, yes. If you’ve been using an incorrect valuation method or a higher daily rate than was necessary, it may be possible to amend previously lodged FBT returns and recover the overpaid tax. We have assisted clients in recovering substantial amounts through prior year analysis — in one case, a refund of approximately $845,000 across several FBT years.
Yes — but it’s calculated very differently, and often much more expensively than expected. Where an employer reimburses an employee for a car parking lease or regular daily parking fees, the benefit is treated as an expense payment benefit valued at the full amount reimbursed — not under the more favourable car parking valuation methods. The difference in tax can be substantial. If your organisation has this arrangement, a specialist review is strongly recommended.
Car parking FBT valuation requires specific expertise in both FBT law and the local parking market — and not every provider offering this service meets the ATO’s requirements. The ATO has previously taken action where valuations were found to be unreliable, auditing clients of those providers as a result. FBT Solutions provides fully ATO-compliant reports, prepared in accordance with the relevant legislation and all current ATO guidance — including TR2021/2 and the ongoing Toowoomba appeal.
Yes. Because the ATO threshold changes annually and commercial car park rates fluctuate, your FBT position needs to be assessed each FBT year before your return is lodged. The FBT year runs from 1 April to 31 March. We manage this annual process for clients, making it a straightforward, low-effort compliance task each year. Check out the 2026 FBT Car Parking Hotspots
Yes. Even where the parking is part of your business premises lease and there is no separate charge to your organisation, it is still treated as the provision of a car parking benefit. The key question remains whether a commercial parking station within 1km charges above the threshold — not whether you’re paying separately for the spaces.
The car parking threshold for the FBT year ending 31 March 2026 is $11.03 per day (up from $10.77 in the 2025 FBT year). A taxable benefit only arises if a commercial parking station within 1km of your premises charges more than this amount as its lowest fee on the first day of the FBT year (1 April 2025).
FBT Solutions provides car parking FBT valuations at competitive pricing per location, with discounts for multiple locations. For a no-obligation fee quote, contact Paul directly on 02 8529 4851, 0403 050 358 or paul.mather@fbtsolutions.com.au.
A short call or email is often all it takes to determine whether you have a liability — and if you do, how to minimise it.
