Cents per KM – Motor Vehicle
The Cents per KM allowance is used when an employee uses their own car for business-related purposes, and they receive a cents per KM to cover costs and expenses (such as registration, fuel, servicing, depreciation and insurance).
Paying your employees for business-related purposes includes traveling from home to a client, or office to a client. This does not include travel from home to the office – except in the case of some limited circumstances.
On the 9th of June, the Commissioner of Taxation announced that the rates for cents per KM allowances were increasing from 72 cents per KM, to 78 cents commencing on 1 July 2022.
How to report this under STP Phase 2
| KM Travelled | Cents per KM Method | Are you required to withhold PAYG? | STP Phase 2 Classification |
| Up to 5000 KM | Up to $0.78 | No | Cents per km allowance (allowance type CD) |
| Amount over $0.78 | Yes | Cents per km allowance (allowance type CD) | |
| Over 5000 KM | Up to $0.78 | Yes | Cents per km allowance (allowance type CD) |
| Amount over $0.78 | Yes | Cents per km allowance (allowance type CD) |
Cents per KM – Vehicles Other Than Cars
Like the Kilometre Allowance for cars, there have also been changes to the rates for vehicles other than cars for this financial year.
The taxation determination for rates of vehicles – other than cars was announced on the 30th of March, where we see an increase for vehicles that are not deemed as cars or motorcycles. In Financial Year 2023, the cents per kilometre rate for motorcycles will however remain unchanged:
| Vehicle Type | FY 2022 | FY 2023 |
| 0-2500cc | 0.56 per KM | 0.58 per KM |
| Over 2500cc | 0.67 per KM | 0.69 per KM |
| Motorcycles | 0.17 per KM | 0.17 per KM |
How to report this under STP Phase 2 – First 5,000 KM
| KM Travelled | Cents per KM Method | Are you required to withhold PAYG? | STP Phase 2 Classification |
| 0-2500cc – Up to 5000 KM | Up to $0.58 | No | Cents per km allowance (allowance type OD and a description V1) |
| Amount over $0.58 | Yes | Cents per km allowance (allowance type OD and a description V1) | |
| Over 2500cc – Up to 5000 KM | Up to $0.69 | No | Cents per km allowance (allowance type OD and a description V1) |
| Amount over $0.69 | Yes | Cents per km allowance (allowance type OD and a description V1) | |
| Motorcycles – Up to 5000 KM | Up to $0.17 | No | Cents per km allowance (allowance type OD and a description V1) |
| Amount over $0.17 | Yes | Cents per km allowance (allowance type OD and a description V1) |
How to report this under STP Phase 2 – Over 5,000 KM
| KM Travelled |
Cents per KM Method |
Are you required to withhold PAYG? |
STP Phase 2 Classification |
| 0-2500cc – Over 5000 KM | Up to $0.58 | Yes | Allowance Type Other (allowance type OD and a description V1) |
| Amount over $0.58 | Yes | Allowance Type Other (allowance type OD and a description V1) | |
| Over 2500cc – Over 5000 KM | Up to $0.69 | Yes | Allowance Type Other (allowance type OD and a description V1) |
|
Amount over $0.69 |
Yes | Allowance Type Other (allowance type OD and a description V1) | |
| Motorcycles – Over 5000 KM |
Up to $0.17 |
Yes | Allowance Type Other (allowance type OD and a description V1) |
|
Amount over $0.17 |
Yes | Allowance Type Other (allowance type OD and a description V1) |
Car Parking Threshold
A car parking allowance is a fringe benefit, where an employer provides car parking where all of the below conditions have been met:
- the car is parked at premises owned or leased by, or otherwise under the control of, the provider (usually the employer)
- the car is parked for a total of more than four hours between 7am and 7pm on any day of the week
- the car is owned by, leased to, or otherwise under the control of, an employee, or is provided by the employer
- the parking is provided in respect of the employee’s employment
- the car is parked at or near the employee’s primary place of employment on that day
- the car is used by the employee to travel between home and work (or work and home) at least once on that day
- there is a commercial parking station that charges a fee for all-day parking within one kilometre of the premises on which the car is parked and
- the commercial parking station fee for all-day parking is more than the car parking threshold, and
- at the beginning of the fringe benefits tax (FBT) year, the commercial parking station fee for all-day parking was more than the car parking threshold.
Car parking is exempt from FBT for employers when it is provided to employees, but not all of the above conditions have been met.
For small businesses, the ATO also defines some additional provisions where car parking will be exempt from FBT.
In Financial Year 2023, the car parking threshold has increased from $9.25 to $9.72.
How to report this under STP Phase 2
| Allowance Type | Allowance Rate | Are you required to withhold PAYG? | STP Phase 2 Classification |
| Car Parking Allowance | Up to $9.72 | No | Allowance Type Other (allowance type OD and a description V1) |
| Amount over $9.72 | Yes | Allowance Type Other (allowance type OD and a description V1) |
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Disclaimer
The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.