A “fringe benefit” will exist if the conditions in the definition in s 136(1) of FBTAA are met.
These requirements are:
- there is a benefit
- it is provided at some point during the year, or in relation to the relevant year of tax• it is given to an employee or an associate of the employee
- it is given by the employer, an associate of the employer, or by another party (an arranger) under an arrangement with the employer or an associate of the employer
- it is in relation to the employment of the employee.
The important aspects of these requirements need to be considered to ensure employers are able to determine if they have a fringe benefits tax liability. Fringe Benefits Tax is levied at 46.5% of the taxable value of the benefit. There may be tax advantages when salary packaging certain benefits.
If you are an employer and your provide fringe benefits to staff, you are required to complete and lodge a Fringe Benefits Tax (FBT) return. The year end for FBT is 31 March. If you require assistance with the preparation of your FBT return, please contact us. The types of benefits subject to FBT are:
| Type of fringe benefit |
Division in FBTAA |
| Car |
2 |
| Debt Waiver |
3 |
| Loan |
4 |
| Expense Payment |
5 |
| Housing |
6 |
| Living away from home allowance |
7 |
| Airline transport |
8 |
| Board |
9 |
| Meal Entertainment |
9A |
| Tax-exempt body entertainment |
10 |
| Car parking |
10A |
| Property |
11 |
| Residual |
12 |
In addition to the above, there is a category of exclusions known as exempt benefits. FBT is not payable in relation to exempt benefits. Division 13 (ss 53-58Z) contains miscellaneous exempt benefits. Specific exemptions also apply to different categories of benefits. Employers should always consider whether an FBT liability may be decreased by an exemption.
Typical exempt benefits include:
- Exempt motor vehicles (one tonne utility and motor bikes primarily used home to work travel only)
- Minor Benefits (under $300)
- Specific entertainment on employers premises
- Exempt relocation expenses, such as removal and storage of household effects
- Some motor vehicle parking benefits
- Compassionate travel
- Work related items used in employment
- Remote Area Housing
- Living away from home allowances
- Some benefits provided by PBI’s, not for profits
There are many conditions to pass to ensure that the above benefits are exempt from fringe benefits tax.
If you require assistance, please contact us on (02) 8264-0755
All representations and information on this site is general in nature and should not be relied upon as advice. If you require specific advice please contact us.