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Fringe Benefits Tax Facts


Fringe Benefits Tax, or FBT, can be a complex tax to understand and to navigate.


That’s why Hub Advisory Group have put together these key Fringe Benefits Tax facts for your reference.


So, what is Fringe Benefits Tax?

FBT is paid by employers on certain benefits that they provide to employees, or their employees’ family or other associates, and it applies even if the benefit is provided by a third party under an specific arrangement with the employer.


According to the ATO (Australian Taxation Office) a fringe benefit is a 'payment' to an employee, but in a different form to salary or wages.


Some examples of a fringe benefit could include:

• allowing an employee to use a work car for private purposes

• giving an employee a discounted loan

• providing car parking for an employee

• paying an employee's gym membership

• providing entertainment, for example, free tickets to concerts or events

• reimbursing an employee expense, such as school fees

• giving benefits under a salary sacrifice arrangement with an employee.


For fringe benefits tax (FBT) purposes, an employee includes:

• a current, future or past employee

• director of a company

• beneficiary of a trust who works in the business.


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.


The Fringe Benefits Tax (FBT) Year

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.

Four steps for lodging a Fringe Benefits Tax Return

Planning

Preparation

Compliance

Reporting

If you would like assistance in planning for and preparing your Fringe Benefits Tax return or would like to discuss options for reducing your FBT liability, contact Hub Advisory Group on (02) 4926 8000 for an appointment.

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