Uber travel expenses not FBT-exempt
The ATO has clarified that any benefit arising from travel by taxi, and not a ride-sourcing service, by an employee is exempt from fringe benefits tax (FBT) if the travel is a single trip beginning or ending at the employee’s place of work.
In particular, the exemption is limited to travel in a vehicle licensed by the relevant state or territory to operate as a taxi. It does not extend to ride-sourcing services provided in a vehicle that is not licensed to operate as a taxi, such as Uber.
“The ATO has clarified that any benefit arising from travel by taxi, and not a ride-sourcing service, by an employee is exempt from FBT.”
Any benefit arising from taxi travel by an employee is also an exempt benefit if the travel is:
- a result of sickness of, or injury to, the employee, and
- the whole or a part of the journey directly between any of the following:
- the employee’s place of work
- the employee’s place of residence, and
- any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.
If you have any questions regarding the above matters, please do not hesitate to contact us.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
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Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
Using ride-sourcing services like Uber for employee transport is generally not FBT-exempt.
Employers offering such rides must recognise that they are likely providing a taxable benefit.
Only rides in licensed taxis qualify for the standard FBT taxi-travel exemption.
The vehicle’s licensing status is a key determinant under FBT law — not whether the service is “taxi-like”.
Alternative exemptions (minor benefits, otherwise deductible rule) may offer relief — but they come with conditions.
Employers should evaluate whether such exemptions apply before assuming a ride-sourcing payment is non-taxable.
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Frequently Asked Questions
Does providing an Uber ride to an employee trigger FBT liability?
Yes — because under current rules, the exemption for “taxi travel” only applies if the vehicle is a licensed taxi. Uber (or similar ride-sourcing services) are not considered licensed taxis for this purpose, so covering an Uber ride for an employee generally counts as a taxable fringe benefit.
What types of travel are exempt from FBT when using conventional taxis?
Travel is exempt if it’s a single trip that begins or ends at the employee’s place of work. Also exempt is travel due to sickness or injury, or other necessary circumstances, provided the transport is via a licensed taxi.
Could the cost of an Uber ride ever be exempt under different rules?
Possibly — for example through the “minor benefits exemption,” which may apply if the benefit’s taxable value is modest (typically under $300) and the ride is provided infrequently and irregularly. But this depends on the specific facts and frequency of such benefits.
What should employers do if they want to avoid FBT when reimbursing travel costs?
Employers should use vehicles that meet the legal “taxi” definition (i.e. licensed taxis) for home-work or similar travel. If using ride-sourcing services, they need to carefully consider FBT implications — or check if alternative exemptions (e.g. minor benefits, otherwise deductible rule) apply.
Has the law changed recently to include ride-sourcing services under the taxi-travel exemption?
As of the article (2019), no. The laws guiding the exemption still require the vehicle to be a licensed taxi. While the definition for “taxi travel” differs under GST, for FBT purposes the narrower definition remains.
Is Uber travel FBT-exempt like taxi travel?
No — Uber (and other ride-sourcing services) aren’t automatically FBT-exempt the way taxi travel can be, because the exemption is limited to vehicles licensed to operate as a taxi in the relevant state or territory. So if I pay for an employee’s Uber trip, it may trigger FBT even if a similar taxi trip would have been exempt.
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