Fringe Benefits Tax FBT ATO Tax

Fringe Benefit Tax (FBT) Obligations

Fringe Benefit Tax (FBT) is a hot topic in tax circles at the moment. It has been a bit of a sleeper for the last 15 years and it’s awakening. The ATO have so much data and information especially with AI capabilities to review and correlate data against what declarations people are making.

FBT is a tax that employers pay on benefits paid to an employee (or their associate, such as a family member) in addition to their salary or wages. FBT is calculated on the taxable value of the benefits you provide and is separate to income tax.

The FBT year ends on the 31st of March 2024. If you provide fringe benefits to your employees, the ATO recommends that you register your business for FBT. As an employer, you must self-assess your FBT liability for the FBT year (1 April to 31 March). If you have an FBT liability, you must lodge an FBT return and pay the FBT you owe.

A fringe benefit is like a payment to an employee, but in a different form to salary or wages. There are different types of fringe benefits. Examples include:

  • allowing an employee to use a work car for private purposes (using a company vehicle has FBT implications if not used 100% for work purposes)
  • car parking
  • 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 an employee a discounted loan
  • giving benefits under a salary sacrifice arrangement with an employee.

The following are not fringe benefits:

  • salary and wages
  • employer contributions to complying super funds
  • shares or rights provided under approved employee share acquisition schemes
  • employment termination payments (including, for example, the gift or sale at a discount of a company car to an employee on termination)
  • payments 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.

For more information about FBT you can head to the ATO’s FBT page.

If you have any questions or queries related to FBT don’t hesitate to contact us at STS Accounting.