Can you claim your motorcycle on your tax?

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If you are doing your tax return right now, you may be able to claim your motorcycle as an expense, but you will have little chance of buying a new motorcycle via a novated lease.

You can’t make legitimate claims on your motorcycle if you just use it to commute to and from your place of work.

However, if you use it for work duties or to travel from your work to a work appointment, you may be able to claim depreciation, maintenance and fuel.

You should check with your accountant to see exactly what is allowed.

Novated lease

However, you will have little success buying a motorcycle on a novated lease to reduce your tax.

A novated lease takes the payment out of your weekly wage before tax, thus reducing the total amount on which you are taxed.

But one reader told us they could not find a leasing agency that would include motorcycles.

It seems to be a fairly grey area.

The ATO’s positiontax sale motorcycles novated lease buying selling

An ATO spokesperson told us there is no provision in the Fringe Benefits Tax (FBT) law or any other tax law prohibiting the provision of a novated lease or similar arrangement related to a motorcycle.

A decision to enter into such an arrangement is a matter for an employer, their employee and any other parties to an arrangement such as a salary packaging service provider or a finance service provider,” the spokesperson says.

In general terms, where an employer provides an employee with a motorcycle as a fringe benefit, it is treated as a ‘residual’ fringe benefit and not a motor vehicle fringe benefit. This means that the FBT treatment of any motorcycle benefit will be different to the FBT treatment of a car fringe benefit.

Information about the FBT treatment of motorcycles is available in Miscellaneous Taxation Ruling MT 2034: Fringe benefits tax : private use of motor vehicles other than cars.  

The leasing company’s perspective

But in the real world, it is a different matter.

We searched for leasing companies that provide novated leases on cars, but couldn’t find any. We asked them to explain why.

It seems most salary packaging companies elect not to do them for commercial reasons as riders make up a very small percentage of total personal transport users. 

The leasing companies would not be quoted directly, but they believe it is a “grey area” in the ATO.

There are three ways a taxpayer can do a novated lease: statutory; log book and as an exempt benefit.

Contrary to what the ATO told us, one leasing company representative said there is no definitive reference on the ATOs website to being able to do a novated lease on a motorcycle.

One even told us a statutory novated lease is impossible because the ATO specifically excludes motorcycles in this category in 2011.

The leasing companies say use of a log book to verify usage is fairly rare these days in large corporations who are their main customers.

Many large corporations even stipulate that their employees are to allowed to use motorcycles as work vehicles.

“They don’t like the image it represents if a corporate employee turns up for a business meeting on a motorcycle or in motorcycle gear,” one leasing company representative told us.

They also say the exempt tax benefit for commercial vehicles strictly limits the usage to riding to and from work and for work purposes only.How to ride safely in heavy traffic lane filtering tax

“The second they go for a leisure ride, they can’t use this any more and the company cops the FBT,” a leasing agent told us.

“It’s just too high a risk for the employers for FBT liability.

“You would have to get a financier to write for a novated lease and get your employer to sign off on it. Some might do it, but it’s very rare.”

ConclusionMotorcycles Glass's Guide sales hot spring motorcycle bargains sell recovering tax

If you work for a company that uses motorcycles in its business, such as a motorcycle courier company or pizza delivery store, you might be in luck.

You should be able to claim most motorcycle expenses on your tax.

However, you will have little luck finding a leasing company to write a novated lease.

See your accountant for a professional opinion.

Even if they say you can get a novated lease for a motorcycle, you may still struggle to find a salary packaging company that will be able or willing to do it.

  • If you’ve been able to claim your bike or get a novated lease, please share your tips with other readers. Leave your comments below.

2 Comments

  1. Travel from home to jobsite 1, No ..
    From jobsite 1- to jb2 , yes
    Upto – jb10 or more , yes
    Full claim .
    In coarse of normal duties & business, training
    & Studies,

    Thats all i know.

  2. The excuse I got when I asked was that motorcycles are considered recreational vehicles and the ATO excludes RVs from novated leases.
    However the only real reason is profit margins bikes can lose a lot more of their value the moment they leave the lot than many cars and trucks also with the exception of some the purchase price is too low on most bikes so there is very little interest accrued over the lease the lease companies don’t have the same purchase power on bikes so again there’s less profits available to them. Then there’s the residual at the end of most leases, it is usually structured that the resale value of the vehicle is still greater than the residual but the residual is usually so high that paying it out is a stupid idea as it would be cheaper for you to get a new vehicle on another lease.
    But here’s the thing that no one tells you Unless you are on the cusp of a higher tax bracket or running a business where you need tax deductions to avoid paying too much tax a novated lease has very little benefit for you tax wise. For most paye employees the difference between having the payment taken out before tax as to after tax is zero! The only benefit is in not having to worry about it and the buying power of the lease company who can knock thousands off the price you’ll pay at a stealer and there is a tax or two that they don’t have to pay then there is usually the service and fuel costs that get bundled into the lease.
    So a novated lease can be the holy grail of tax minimising for many and an easier option than looking after it all yourself but for most of us there is no real financial benefit.

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