29Motor vehicle allowances

29 Motor vehicle allowances (1) For this Act, wages, for a financial year, does not include the exempt component of a motor vehicle allowance paid or payable for the year. (2) Accordingly, if the total motor vehicle allowance paid or payable to an employee for a financial year does not exceed the exempt component, the motor vehicle allowance is not wages for this Act. (3) If the total motor vehicle allowance paid or payable to an employee for a financial year exceeds the exempt component (if any), only the amount that exceeds the exempt component of the motor vehicle allowance is included as wages for this Act. (4) The exempt component of a motor vehicle allowance paid or payable for a financial year is worked out as follows: E = K × R E means the exempt component. K means the number of business kilometres travelled in the financial R means the exempt rate for the financial year. (6) K is worked out using the continuous recording method, or the averaging method, whichever method is selected and used by the employer under schedule 1, part 1.5 (Motor vehicle allowances). (7) A reference in subsection (6) to the method in schedule 1, part 1.5 includes that method as applied under schedule 2A, division 2A.2.5.

(8) The commissioner may, in writing, approve the use by an employer of another method of working out K (including the use of an estimate). Note Power to make a statutory instrument includes power to make different provision for different categories (see Legislation Act, s 48). (9) If the commissioner approves the use of a method under subsection (8) for an employer for a financial year, the employer must use the method to work out K. (10) The Minister may determine the exempt rate for a financial year. (11) A determination is a notifiable instrument. (12) For this section, the exempt rate for a financial year is— (a) the rate determined by legislative instrument under the ITAA, section 28-25 (How to calculate your deduction) for working out a deduction for car expenses using the cents per kilometre method in the financial year immediately before the financial year in which the allowance is paid or payable; or (b) if there is more than 1 rate under the determination mentioned in paragraph (a), the highest of those rates; or (c) if no rate mentioned in paragraph (a) is prescribed—the rate determined by the Minister under subsection (10). 30 Accommodation allowances (1) For this Act, wages, for a financial year, does not include an accommodation allowance paid or payable to an employee for a night’s absence from the person’s usual place of residence that does not exceed the exempt rate. (2) If the accommodation allowance paid or payable to an employee for a night’s absence from the person’s usual place of residence exceeds the exempt rate, wages includes the allowance only to the extent that it exceeds the exempt rate.

Contractor provisions Division 3.7 (3) The Minister may determine the exempt rate for a financial year. (4) For this section, the exempt rate for a financial year is— (a) the total reasonable amount for daily travel allowance expenses using the lowest capital city for the lowest salary band for the financial year determined by the Commissioner of Taxation of the Commonwealth; or (b) if no determination mentioned in paragraph (a) is in force—the rate determined by the Minister under subsection (3). (5) A determination under this section is a notifiable instrument.