These passages from a jurisdictional ruling of the Fair Work Commission in an unfair dismissal case contain very useful points which are used by the Commission when determining whether the value of allowances, in this case motor vehicle allowances, are to be included when calculating the annual rate of earnings and thus whether an employee is protected from unfair dismissal or his or her earnings exceed the high income threshold.
 In the Full Bench decision Sam Technology Engineers Pty Ltd v Bernado 15, Deputy Presidents Gostencnik and Clancy and Commissioner Saunders (as he was then) helpfully provided a formula for the calculation of the additional benefit provided by a car allowance. The formula is as follows:
(a) “If a car allowance is paid to an employee in circumstances in which there is no requirement or expectation that the employee will have to use his or her car for work purposes, then the whole of the car allowance is, in reality, part of the employee’s wages and is therefore included in their “earnings”; or
(b) If a car allowance is paid to an employee at the time of their dismissal in circumstances in which there is a requirement or expectation that the employee will have to use his or her car for work purposes, then it will be necessary to determine and calculate the private benefit, if any, derived by the employee from the car allowance. To that end, we suggest the following methodology, which is based on the approach taken in Fewings:
- Determine the annual distance travelled by the car in question. The amount of the annual distance will be as follows:
- if the car allowance has been paid for at least 12 months prior to the dismissal – the distance travelled by the car over the 12 months immediately prior to the dismissal; or
- if the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the distance travelled by the car in the period during which the car allowance has been paid and then extrapolate that distance over a period of 12 months to calculate an annual distance. For example, if an employee moved into a new position with his or her employer 6 months prior to his or her dismissal, received a car allowance during that 6 month period, and drove his or her car for 10,000 km in that 6 month period, the assumed annual distance travelled by the car for the purpose of calculating the employee’s “annual rate of earnings” would be 20,000 km.
- Determine the percentage of the annual distance travelled which was for business use, which would not include travel between the employee’s home and usual place of work. If the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the business use percentage of the distance travelled in the period during which the car allowance was paid.
- Multiply the annual distance calculated in accordance with paragraph 1 above by the business use percentage calculated in accordance with paragraph 2 above. This provides the annual distance travelled for business purposes.
- Estimate the cost per kilometre for a car of the type used. This information can be obtained from the RACV, NRMA or like motoring organisations.
- Multiply the annual distance travelled for business purposes by the estimated cost per kilometre. The result is the annual cost of using the car for work purposes. Compare that annual cost with the amount of the annual car allowance. The amount of the annual car allowance will be as follows:
- if the car allowance was paid for at least 12 months prior to the dismissal – the amount of the car allowance paid to the employee in the 12 months immediately prior to the dismissal; or
- if the car allowance has been paid for a period of less than 12 months prior to the dismissal, determine the amount of the car allowance paid in that period and then extrapolate that payment over a period of 12 months to calculate an annual amount of the car allowance. For example, if an employee in a business other than a small business was employed in that business for a period of 9 months prior to his or her dismissal, and received a car allowance of $2,000 each month in that 9 month period, the assumed annual car allowance for the purpose of calculating the employee’s “annual rate of earnings” would be $24,000 ($2,000/month x 12 months = $24,000).
- If the amount of the annual car allowance exceeds the annual cost of using the car for work purposes, the difference is the private benefit to the employee of the car allowance, which forms part of their “annual rate of earnings.”
 For the calculation above, I note that the Applicant has received the car allowance for longer than 12 months.
 An extract from the Respondent’s payroll system confirms the annual amount of car allowance received by the Applicant in the year immediately preceding the termination of the Applicant’s employment is $15,000.
 The first step as laid out in Bernardo, is determining the total kilometres travelled by the Applicant in the year before he was terminated. The Respondent has provided a fuel card report which indicates that the Applicant travelled a total distance of 17,095 kilometres between 20 December 2020 and 28 September 2021. Data from 28 September 2021 to 20 December 2021 was not available to the Respondent due to a system change, however if the above figure is annualised, the estimated rate of travel per year equates to 22,048 kilometres (17,095÷283 days = 60.4064 travelled per day. 60.4064 x 365 days = 22,048 estimated kilometres).
 The second step involves a determination of the percentage of the 22,048 kilometres that can be attributed personal use and the amount travelled for business purposes. The Respondent submits that 50% should be attributed to business use and 50% to private use. The Respondent submitted the following evidence in coming to this amount:
“Based on my inquiries as to the Applicant’s work commitments during that period, and the distance to and from his home, I would assess the percentage of annual distance travelled which was for business purposes to be less than 50%. This assessment is made on the basis that:
Based on the total annual kilometres, the Applicant was travelling an average of 424 kilometres per week.
Attached as EC6 is a copy of a Google maps screenshot which shows that the total distance from the Applicant’s home to work is 55.7 kilometres.
Attached as EC7 is the Applicant’s Outlook calendar from December 2020 to December 2021 which shows that the vast majority of the meetings the Applicant had scheduled during that period were by videoconference or teleconference and therefore did not require him to travel.
Attached as EC8 is a spreadsheet which has extracted all the data of etag payments which K&S have made on the Applicant’s behalf for tolls he incurred while driving. I have summarised the data in the first tab, and it shows that approximately 45% of those payments were for trips taken outside of work in the Applicant’s personal time, either while the Applicant was on leave, on weekends, public holidays or after hours. Of the remaining 55% that occurred during weekdays, K&S would expect that a reasonable proportion of these were personal too, although this is more difficult to estimate.
For a great proportion of the period from December 2020 to December 2021 Victoria was operating under stage 3 or stage 4 restrictions which required the Applicant to work from home. The Applicant worked from home during this period and his office was reallocated to another staff member who was still required to attend the office. It is estimated that during these periods the Applicant’s use of his vehicle for business purposes would have been negligible.
I note that the Applicant claimed in his FBT business declaration attached as EC9 on 6 April 2021 that the business portion of the total kilometres travelled during the period 1 April 2020 to 31 March 2021 to be 85%. However, for the reasons outlined above, I believe this is incorrect and significantly overstates the business portion of the Applicant’s vehicle use.” 16
 I have accepted the above estimation of the apportionment of personal and business travel as posited by the Respondent.
 Therefore, I calculate the total amount travelled in the past year for business use is 11,024 kilometres, being 50% of 22,048 Kilometres.
 The fourth step involves establishing the cost per kilometre of operating the Applicant’s car. The Respondent submitted that the Applicant drives a Jeep Grand Cherokee. 17 The RACV Vehicle Running Guide 2021 does not contain information relating to a Jeep Grand Cherokee however I have accepted the Respondent’s method of using a Toyota Kluger GX as comparable vehicle. I note that like the Jeep, the Toyota Kluger GX is a large Sports Utility Vehicle (SUV) of a comparable specification.
 The RACV guide states that the cost for running a Toyota Kluger GX per year is as follows:
- Loan repayments: $13,011.84
- Registration/insurance/membership: $2,340.24
- Fuel: $1972.08
- Servicing: $735.00 (based on 15,000 km driven per year). This equates to $0.049 per kilometre).
- Tyres: $243.96 (based on 15,000 km driven per year). This equates to $0.016264 per kilometre).
 I note for the purpose of the calculation that the Applicant had a separately provided company fuel card and as such this input is not relevant for the car allowance calculation above.
 I therefore calculate the annual cost of travel is as follows:
- Loan repayments: $6,505.92 (50% of $13,011.84)
- Registration/insurance/membership: $1,170.12 (50% of $2,340.24)
- Servicing: $540.18 ($0.049 x 11,024 kilometres)
- Tyres: $179.30 ($0.016 x 11,024 kilometres).
 The total annual cost attributable to business purposes is therefore $8,395.52. I therefore determine that the private benefit, to form part of the Applicant’s yearly earnings, attributable to the car allowance, is $6,604.48 ($15,000 – $8,395.52).
 The Respondent’s evidence as to the Fuel Card indicates that between 20 December 2020 to 28 September 2021 the Applicant charged $2996.53 to the company-provided fuel card. 18 This equates to approximately $10.59 per day ($2996.53÷283) that when annualised equates to $3,864.78. I have found that the Applicant had private beneficial use of his motor vehicle for 50% of total kilometres travelled. As such, I find that 50% of the annual charge to the Applicant’s fuel card should contribute to his annual earnings. As the annual charge in 2021 was $3,864.78, I find that $1,932.39 (50% of $3,864.78) should form part of the Applicant’s annual earnings.
 With respect to the treatment of toll charges, a Full Bench of the Fair Work Commission in Zappia v Universal Music Australia 19 stated that:
“Finally, his Honour was correct in taking into account the value of the tolls paid by the respondent in respect of the private portion of the appellant’s travel. It matters not that this was by way of reimbursement, rather than by direct payment. The payment of the tolls was a benefit other than payment of money for the purposes of regulation 3.05(6). In the event that it was not, applying a purposive approach to the interpretation of the word “reimbursements” in section 332(2)(b) of the Act, the word does not contemplate reimbursements of outlays incurred for private, as approved by business, purposes. The payment by an employer for an employee’s private outgoings, whether directly or by way of reimbursement, clearly constitutes part of that employee’s remuneration.” 20
 The Respondent provided a breakdown of when the Applicant used his company provided E-tag in the year December 2020 – December 2021 and I have reproduced this table below:
 I accept the Respondent’s submission that 113 out of 253 trips fell outside of weekday work hours travel and should be considered a private benefit in line with the decision in Zappia. As these trips constitute $468.17 of the total use of the E-tag for the period December 2020 to December 2021, and the total charge on the E-tag for that period was $1.158.79, I find that $468.17 of tolls was charged for private benefit and should form part of the Applicant’s annual earnings for the purposes of s.382 of the Act.
 For the reasons above, I consider that the Applicant’s annual rate of earnings at the date of his termination is to be calculated by totalling the following:
- Annual Base Salary $156,999.25 (see paragraph  above);
- Car allowance $6,604.48 (see paragraph  above);
- Fuel card charges for private benefit $1,932.39 (see paragraph  above); and
- Toll charges for private benefit $468.17 (see paragraph  above).
 I therefore find that the Applicant’s total annual earnings in the year preceding his dismissal is calculated at $166,004.29.
 I have found that the CS Award did not cover the Applicant at the time he was dismissed from his employment and that the Applicant’s annual rate of earnings was more than the high income threshold of $158,500. On that basis, the Respondent’s jurisdictional objection is upheld. As the Applicant is not a person protected from unfair dismissal withing the meaning of s.382 of the Act, his application is dismissed.”
Marchetti v K&S Freighters Pty Ltd (2022) MFWC 1177 delivered 19 May 2022 per Cirkovic C