Fringe Benefits Tax refresher and checklist

Fringe Benefits Tax (FBT) is paid by employers on certain benefits they provide to their employees or their employees’ family or other associates. FBT applies even if the benefit is provided by a third party under an arrangement with the employer.

For FBT purposes, an employee includes a current, future or past employee, a director of a company, or a beneficiary of a trust who works in the business.

Examples of fringe benefits:

• 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

The following are not fringe benefits:

• salary and wages
• shares purchased under approved employee share acquisition schemes
• employer contributions to complying super funds
• employment termination payments (including for example, the gift or sale at a discount of a company car to an employee on termination)
• payment of amounts deemed to be dividends under Division 7A
• benefits provided to volunteers and contractors
• exempt benefits such as certain benefits provided by religious institutions to their religious practitioners.

FBT is separate to income tax and is calculated on the taxable value of the fringe benefit. The employer must self-assess their FBT liability for the FBT year (1 April to 31 March) and lodge an FBT return.

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits.

What action is required?

1. Review this checklist of fringe benefit items.
2. Consider if any fringe benefits have been provided.
3. Contact our office to discuss in further detail, if applicable. We can then assist with the registration for Fringe Benefits Tax and discuss the requirements.

 

Further help

Should you have any questions about fringe benefits tax matters, please contact us for further advice. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au

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