What is Fringe Benefits Tax (FBT)?
Fringe Benefits Tax (FBT) is a tax paid by the employer in respect of non-cash benefits provided to their employees. This tax is paid annually and is deductible to the employer.
Common Benefits subject to FBT
Motor Vehicles
A typical example of a fringe benefit is where a motor vehicle is provided to an employee and that vehicle is not used 100% for business.
To determine the business usage, the employee would need to keep a log book for a 12 week period.
This log book will determine if there is any private usage, which in turn will be used by the employer to calculate the FBT payable.
Christmas Parties
Another common example of fringe benefits relates to the annual Christmas party. Providing your employees with a Christmas party can be a fun and deserving occasion. However FBT can apply under various circumstances.
What are your reporting obligations?
Any benefits provided between 1 April 2016 and 31 March 2017 will need to be included in the 2017 FBT Return. Likewise, any benefits that are deemed to be reportable (the taxable value of the benefit exceeds $2,000 for any individual employee) must be shown on the employee’s 2017 payment summary.
If you require further information on FBT, don’t hesitate to contact us on (02) 9525 2455 or click here.
