As FBT year-end rapidly approaches, here are a few things that you might need to familiarise yourself with!
What is FBT?
As mentioned by the ATO, the Fringe Benefits Tax is a tax employers pay on specific benefits they provide for their employees. This may be in addition to/part of an employee’s salary. This year, employers need to pay a rate of 49% on the grossed-up taxable value of fringe benefits provided. This must be lodged by the 21st of May if you are considering lodging by paper. If you are lodging through a tax agent, the FBT needs to be lodged by 25th of June.
Types of Fringe Benefits:
Car fringe benefits
Car parking fringe benefits
Entertainment and fringe benefits
Expense payment fringe benefits
Loan fringe benefits
Debt waiver fringe benefits
Housing fringe benefits
Board fringe benefits
Living away from home allowance fringe benefits
Property fringe benefits (including property, goods or shares)
Residual fringe benefits
Examples of FBT:
When your employer
– allows you to use a work car for private purposes (car fringe benefit)
– provides you with entertainment by way of food, drink or recreation (entertainment fringe benefit)
– provides you with goods at lower prices than they are normally sold to the public (property fringe benefit)
How can I as an employer reduce my FBT liability?
You can:
– Replace fringe benefits with cash salary. If you do so the employee pays income tax on the salary meaning you do not incur FBT liability
– provide benefits that your employees could claim as an income tax deduction if they had paid for the benefits themselves
– provide benefits that are exempt from FBT
– Use employee contributions. So when an employee contributes towards the cost of providing their fringe benefits (e.g. paying for fuel for a car received from car fringe benefit) employee contributions may be assessable income to you and may be subject to GST.
If you’re at all confused about anything to do with FBT – please don’t hesitate to get in touch with the team at Fortis Accounting Partners. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com
