From 1 July 2008, motor vehicle allowances and overnight accommodation allowances are exempt from payroll tax up to thresholds based on rates used by the Australian Taxation Office (ATO). Prior to this date, tax was payable on the full amount of the allowance.
The exempt rate for motor vehicle allowances is the ATO rate for calculating a deduction for car expenses for a large car using the cents per kilometre method for the financial year immediately before the financial year in which the allowance is paid or payable.
The exempt rate for accommodation allowances is total reasonable amount for daily travel allowance expense as determined by the ATO for the lowest capital city in the lowest salary band.
The following table details the exempt rates by financial year commencing from 2008-09.
Financial Year |
Motor Vehicles (per kilometre) |
Accommodation (per night) |
2009-10 |
75 cents |
$223.80 |
2008-09 |
70 cents |
$218.30 |
For more information on the treatment of motor vehicle and accommodation allowances, refer to Payroll Tax Ruling PTA005.