Fringe Benefits Tax is a tax paid on certain non-cash benefits you provide to your employees or your employee’s associates.
The fringe benefits tax year runs from 1 April to 31 March and any taxes applicable are due in May.
There are many fringe benefits that are captured by the rules but they can be broken down into three categories: rights, privileges and services. Some examples include: allowing your employee to use a work car for private purposes, giving your employee a cheap loan, reimbursing an expense incurred by your employee or providing entertainment (food, drink or recreation).
The ATO have a quick checklist to see if you are providing a fringe benefit. If you answer yes to any of the following questions, you may have to pay FBT.
- Do your employees take cars home and garage them overnight?
- Do your employees use cars or other vehicles the business owns for private use?
- Do you have a salary package arrangement with any of your employees?
- Have you paid or reimbursed any employees’ expenses?
- Do you provide entertainment, such as food, drink or recreation to your employees?
- Have you given property, such as electrical goods, to your employees either free or at a discount?
- Do you provide any employees with a house or unit of accommodation?
- Do you provide loans at a reduced interest rate to any employees?
- Have you released any employee from a debt they owed the business?
- Do you provide any employees with living-away-from-home allowances?
- Are you a tax-exempt organisation that has provided food, drink or accommodation to employees?
Each of the above are a fringe benefit category and each category has specific valuation rules.
Once you have identified that you do have fringe benefits, you then need to go about calculating and reporting them.
The easiest next step is to simply get in touch with the team here at Fortis Accounting Partners for more information and assistance with the calculation and lodgement of the Fringe Benefits Tax Return. You can reach us on 02 9267 0108, or via info@exemplary-financial.flywheelsites.com.
