Fringe Benefits Tax (FBT) is a tax paid by employers on certain non-cash benefits provided to employees, their associates (e.g. family members), or directors e.g. company car, gym membership, health insurance.
It is separate from income tax and is calculated on the taxable value of the fringe benefits provided.
You can learn more about the basics of FBT and how it’s calculated in our FBT blog.
Working out if you might have an FBT liability
To figure out if you might need to pay Fringe Benefit Tax, ask yourself the following:
- Has your business provided entertainment (e.g., Christmas parties, business lunches)?
- Are company vehicles available for private use?
- Are there any salary packaging (salary sacrifice) arrangements?
- Have you provided employees with discounted goods or services?
- Does your business provide car parking, loans, or forgiven debts?
- Have you covered or reimbursed any private expenses for employees?
- Do you provide accommodation or living-away-from-home allowances?
If you answered YES to any of the above, you may have FBT obligations and need to be registered for FBT.
Motor vehicles and entertainment can be areas of confusion with complex rules (especially as the treatment of these expenses can interact with income tax and GST), so if you're unsure please check with your accountant.
FBT Exemptions
Certain fringe benefits are exempt from FBT such as portable devices, tools of the trade and protective clothing required for the job.
Additionally, minor benefits valued under $300 and provided infrequently (less than 12 times total per year) may also be exempt.
However, to ensure compliance it’s always best to check with your accountant whether a specific benefit qualifies for exemption.
FBT Filing
In Australia, the FBT year runs from 1 April to 31 March.
The standard deadline to lodge and pay is 21 May. However, if it’s lodged through a tax agent and done electronically, the deadline may be extended to 25 June.
As your accountant, we can help prepare and file your FBT return. Contact your Beany accountant directly or reach out to our support team for more information.