2018 Auto Fringe Benefit Calculation

What is Auto Fringe Benefit?

Auto fringe benefits are non-cash benefits provided by an employer to employees that relate to the use of a private vehicle. Common examples include:

• Company-provided cars
• Fuel cards
• Parking allowances
• Toll reimbursements
• Vehicle maintenance allowances

These benefits are considered taxable fringe benefits because they provide economic value to the employee that would otherwise be paid as cash wages. The employer must include the fair market value of these benefits in the employee's gross income.

2018 Calculation Method

For 2018, the calculation of auto fringe benefits follows these steps:

1. Determine the fair market value of the benefit
2. Calculate the taxable value based on the employee's actual use of the benefit
3. Add the taxable value to the employee's gross income

The fair market value is typically based on the actual cost to the employer or the market value of similar benefits. The employee's use percentage is determined by comparing the actual use to the total available benefits.

Additional costs may include:

• Depreciation of the vehicle
• Insurance costs
• Registration and licensing fees
• Fuel costs
• Maintenance costs

How to Use This Calculator

Our calculator simplifies the process of determining the taxable value of auto fringe benefits for 2018. Follow these steps:

1. Enter the fair market value of the benefit
2. Enter the employee's use percentage
3. Add any additional costs
4. Click "Calculate" to see the taxable value

Example Calculation

Let's walk through an example to illustrate how the calculation works. Suppose an employee receives a company car with the following details:

• Fair market value of the car: $35,000
• Employee's use percentage: 70%
• Additional costs: $2,500 (depreciation, insurance, etc.)

Using the formula:

The taxable value of the auto fringe benefit in this example is $27,000. This amount would be added to the employee's gross income for tax purposes.