fringe benefits tax
Fringe benefits tax (FBT) is a tax employers pay on certain benefits they provide to their employees, including their employees’ family or other associates. The benefit may be in addition to, or part of, their salary or wage package. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.
The fringe benefit tax (FBT) year runs from 1 April to 31 March, and reportable fringe benefits apply to employee payment summaries in the corresponding financial year (1 July to 30 June).
The main types of fringe benefits include:
- car (see ‘taxing the benefits of vehicle’s in chapter 15)
- car parking
- expense payment
- debt waiver
- living away from home
- residual (any benefit including a right, service, privilege or facility that is not covered in the main categories above).
Some benefits are exempt from FBT or receive concessions, with specific concessions and exemptions applying to some non-profit organisations. These include:
- work-related items (includes electronic devices, protective clothing and tools of the trade)
- minor benefits (less than $300 in notional tax value)
- taxi travel expenses (a single trip beginning or ending that the employee’s place of work)
- small business car parking
- living away from home allowance (limited concessions apply).
For more details about the different types of fringe benefits and the tax implications, go the ‘types of fringe benefits tax’ page on the ATO website.
reporting fringe benefits
If you provide reportable fringe benefits exceeding $2,000 (as at April 2018) to an employee or their associate (for example, a spouse) during an FBT year, you need to report the grossed-up taxable value of the fringe benefits on the employee’s annual payment summary for the corresponding income year.
Employers should seek expert advice. For a comprehensive FBT overview, visit the ‘Fringe benefits tax’ page on the ATO website
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