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FRINGE BENEFITS TAX
A fringe benefit is a ‘payment’ to an employee, but in a different form to salary or wages. More specifically, it is where a personal benefit has been provided to an employee or an associate of an employee, by an employer or an associate of an employer, in the course of employment.
Examples
- allowing an employee to use a work car for private purposes
- giving an employee a discounted loan
- paying an employee’s gym membership
- providing entertainment by way of free tickets to concerts
- reimbursing an expense incurred by an employee, such as school fees
- giving benefits under a salary sacrifice arrangement with an employee.
FBT & FAA
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Key FAQs
1. Am I providing Fringe Benefits?
The following list will help you work out if you are already providing a fringe benefit to your employees. If any of the following apply, you may have an FBT liability.
- Do you hold any cars or other vehicles that are available to employees for their private use, including a car garaged at the employees’ place of residence?
- Do you provide loans at reduced interest rates to employees?
- Have you released an employee from a debt?
- Have you paid for, or reimbursed, an employee’s non-business expense?
- Do you provide a house or other accommodation to your employees?
- Do you provide employees with living-away-from-home allowances?
- Do you provide entertainment including food, drink or recreation to your employees?
- Do any of your employees have a salary package arrangement in place?
- Have you provided your employees with goods at a lower price than they are normally sold to the public?
2. Can I reduce my Fringe Benefits Tax liability?
Yes, there are various ways you can reduce your FBT liability – sometimes to nil. You can reduce an FBT liability in the following ways.
- Replace fringe benefits with cash salary
- Provide benefits that are exempt from FBT or are concessionally treated
- Provide tax-deductible benefits
- Use employee contributions
See FAQ’s for further details
3. What Fringe Benefits do I have to report?
The value of all fringe benefits, other than excluded fringe benefits, must be allocated to the relevant employees and reported.
You must also allocate to the relevant employees the notional taxable value of benefits that are exempt solely because an employee either
- works in or for a
- public benevolent institution
- registered religious institutions
- health promotion charity
- hospital
- public ambulance service, or
- is a live-in residential care worker.
These benefits although reportable are exempt from FBT.
4. Are there Fringe Benefit Tax payroll reporting exemptions available?
Yes, there are exemptions for the following types of entities and circumstances:
- registered public benevolent institutions endorsed as exempt from FBT
- government bodies where the employee’s duties are exclusively performed in or in connection with
- a public hospital, or
- a hospital carried on by a society or association that is a rebatable employer
- registered health promotion charities endorsed as exempt from FBT
- public ambulance services and the employee is predominantly involved in providing that service.
5. Already have in-house accountants. Where we fit in?
**Already assumes we can do everything but can also just be supportive**
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Diagram re SP Employer does vs what we do for them
Still have questions, contact one of our specialists to start the conversation on how we can help.
