Tax Facts

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Tax Facts

In today’s ever-changing market the complexity in providing the most appropriate Accounting and Tax advice is paramount. Every business in every range of profitability requires financial reporting that can be the basis of their growth and ultimate success. We provide accounting services designed for both the expected and the unexpected, guiding our clients through the full range of tax planning strategies that minimize liabilities. Our expertise, experience, analysis, allow us to optimize financial opportunities to be found in existing as well as recently altered tax laws.

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    Tax Facts - Fringe Benefits Tax

    Fringe Benefits Tax (FBT) is paid on particular benefits employers provide to their employees or their employees' associates instead of salary or wages. Benefits can be provided by an employer, an associate of an employer, or a third party by arrangement with an employer. An employee can be a former, current, or future employee.

    FBT is separate from income tax and based on the taxable value of the various fringe benefits provided. The FBT year runs from 1 April - 31 March.


    FBT CATEGORIES

    The following categories of fringe benefits apply, with specific valuation properties applicable to each category:

    • Airline transport board - Eg a meal
    • Car - Eg letting employees use a work vehicle for a private purpose
    • Car parking
    • Debt waiver
    • Entertainment - Eg food, drink, recreation
    • Expense payment - Eg reimbursing an expense incurred by an employee such as school fees
    • Housing
    • Living-away-from-home allowance
    • Loan - Eg granting an employee a cheap loan
    • Property
    • Residual

    MORE: See the ATO website for more on FBT categories.


    FBT EXCLUSIONS

    The following are NOT fringe benefits:

    • Approved employee share acquisition schemes
    • Employer contributions to complying superannuation funds
    • Employment termination payments - Eg company car given or sold to employee when they leave
    • Certain benefits provided by religious institutions to their religious practitioner

    REDUCING FBT

    You can reduce the amount of FBT you pay by:

    • Replacing fringe benefits with a cash salary
    • Providing benefits that your employees would be entitled to claim as an income tax deduction if they had paid for the benefits themselves
    • Providing benefits that are exempt from FBT
    • Using employee contributions

    MORE: Read more about FBT for small businesses on the ATO website.