Fringe benefits tax (FBT) is payable on certain benefits you provide to your employees or their associates. These benefits are in addition to, or part of, your employees’ salary or wages package. So, do you provide benefits to your employees?
FBT is separate from income tax and is calculated on the taxable value of the benefits provided to employees.
Examples include providing your employee (or someone close to them) with:
- vehicles for private use
- holiday accommodation
- concert tickets
- memberships.
Some benefits are exempt or receive concessional treatment, so it’s good to brush up on what benefits attract FBT.
When to report FBT?
The FBT year ends on 31 March.
If you’ve provided any fringe benefits since 1 April 2018, you need to:
- calculate your fringe benefits taxable amounts
- lodge and pay your FBT return by 21 May (or lodgement may be later if you use a tax agent).
Remember, registered tax agents and BAS agents can help you with your tax.
Do you need to pay FBT?
You may be required to pay fringe benefits tax (FBT) if you provide certain fringe benefits to an employee (or their associate) in respect of employment. An employee can be a current, future or past employee, or a director of a company or trust.
You will need to pay FBT even if the benefit is provided to an associate of your employee or by a third party under an arrangement with you.
Examples of fringe benefits include:
- allowing your employee to use a work car for private purposes
- giving your employee a discounted loan
- paying an employee’s gym membership
- providing entertainment by way of free tickets to concerts
- reimbursing an expense incurred by your employee, such as school fees
- giving benefits under a salary sacrifice arrangement with an employee.
Some employers, including charities, need to assess the status of their workers when working out their FBT liability. Generally, benefits provided to volunteers and contractors don’t attract FBT.
You must self-assess your own FBT liability each FBT year (1 April to 31 March) and lodge an FBT return before the due date.
Next steps:
FBT exemptions and concessions
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
For more information in regards to how to calculate your FBT, how to register, report, lodge and pay FBT – contact the Fringe Benefits Tax experts at DGL Accountants.