Here is an ASIC-compliant article suitable for an Australian audience on When is travel between home and work subject to Fringe Benefits Tax (FBT). It is based on actual facts, referenced from the Australian Taxation Office (ATO) and other trusted sources.
Travelling between home and your regular place of work is generally considered private travel for tax and FBT purposes. This means that if an employer provides a vehicle (or reimburses travel) and the employee uses it for their daily commute, the travel is likely to attract FBT.
However, there are specific circumstances where travel from home to work (or vice versa) may not be treated as private use and therefore may not automatically trigger FBT. Understanding these exceptions is important for employers and employees to ensure correct tax treatment.
According to the ATO and relevant tax rulings, the journey from home to a “regular place of work” is private travel and is not deductible for the individual and should be treated as a fringe benefit if reimbursed or charged to an employer-provided vehicle.
The key term is “regular place of work.” If an employee has a fixed workplace which they travel to daily, the commute is private in nature. The ATO’s Tax Ruling TR 2021/1 makes this clear: “ordinary travel between home and a regular place of work” is not deductible for income tax and similarly influences FBT treatment.
For employers, this means that providing or facilitating that commute through an employer-provided vehicle could create a taxable fringe benefit, unless one of the specific exceptions applies.
There are some recognised exceptions in which home-to-work travel may be treated as “in the course of” employment and so may avoid FBT (or income tax deduction for the employee). These include:
It is important to document the facts of the journey, the nature of the work, and any equipment carried, to support that the travel qualifies under one of these exceptions.
When travel is treated as private, the employer providing the vehicle or reimbursing the travel may incur an FBT liability. The benefit is the travel service provided to the employee. Employers need to consider this when structuring vehicle use and employee travel arrangements.
Conversely, if travel qualifies as business-related, the employer may avoid FBT on that travel benefit, and the employee may be eligible for income tax deductions (in certain cases). Employers and advisers should review the facts carefully to ensure compliance.
In most cases, daily travel between home and a fixed workplace is private and will expose the employer to FBT if the vehicle or travel cost is provided. Only where one of the recognised exceptions applies — such as transporting essential equipment, operating from multiple locations, or starting work from home — will that travel potentially avoid FBT. Employers and employees should assess their travel arrangements carefully and keep full records to support their position.
