Fringe benefits tax (FBT) is a tax payable for certain benefits that employers provide to their employees, their family or associates.
These benefits may be in addition to their existing salary package and may include things such as car expenses, car parking, entertainment and other expenses. The ATO has put together a list of the types of fringe benefits common within the workplace.
If you are director of a company or trust, benefits that you receive may be subject to FBT.
FBT is separate from income tax and GST and is calculated on the taxable value of the benefits provided to the employee. Unlike income tax, the FBT year runs from 1st April to 31st March each year.
Do I Need To Pay FBT?
As an employer you may be required to pay FBT if you provide certain benefits to an employee (or associate) in respect of their employment.
Some examples include:
• Employees using a work car for private purposes (this includes driving it home and keeping car at the employee’s residence)
• Paying an employee’s gym membership
• Providing free tickets to the football or a concert
FBT Exemptions & Concessions
Some benefits are exempt from FBT or may receive concessional treatment. These include:
• Portable electronic devices including mobile phones, laptops and tablets
• Computer software
• Taxi travel expenses
• Living away from home allowance
For a complete list of benefits that are exempt from fringe benefits tax, visit the ATO website. Contact our office if you’re unsure which exemptions and concessions apply to you.
How To Register For FBT
If you’ve determined that you are providing fringe benefits and are required to pay FBT, you must register for FBT. This can be done by phone or via a registered tax agent. The ATO website has further information that can assist with getting you started with FBT.
If you’re looking for assistance with anything tax related, contact the team at Carbon Accounting. Call on (08) 9446 8588.