The new tax perk if you use rideshare services for work


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Businesses which use rideshare services will no longer be hit with fringe benefits tax, having been granted an exemption previously reserved for taxis.

  • Previously, the exemption for an employee's taxi travel applied if:
  • the trip begins or ends at the employee's place of work; or

the trip is directly between any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

ride share fringe benefits tax

In short, what previously applied for a taxi now also applies to ride shares; indeed the legislation will reportedly only replace "taxi" with "a motor vehicle used for taxi services".

"It's logical that the exemption occurred, especially after a few years ago when the ATO ruled that Uber and the like were taxi services," says Adrian Raftery from Mr Taxman.

"The employers benefit and usually as a result the employees could benefit, since they usually get slugged with FBT on their salary package, so there's scope for employers to increase wages."

The move has been welcomes by rideshare services.

"With this change, even more businesses and government agencies will be able to unlock the benefits of ridesharing - from greater reliability and GPS tracking, to lower costs and the ability to redeploy that travel spend more effectively," says Georgia Foster from Uber.

"Employees too will be able to claim transport costs from their employers, confident in the knowledge that their company won't be liable for a fringe benefits tax as a result."

Simon Smith from Ola Australia and New Zealand agrees that the changes mean Aussie businesses can now "provide a more reliable and convenient transportation option for their employees for work related travel."

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David Thornton was a journalist at Money from September 2019 to November 2021. He previously worked at Your Money, covering market news as producer of Trading Day Live. Before that, he covered business and finance news at The Constant Investor. David holds a Masters of International Relations from the University of Melbourne.

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