Fringe benefits tax overview
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Fringe Benefits Tax What is Fringe Benefit Tax? FBT is an additional tax payable by the employer. If you give your staff anything other than a salary (or superannuation) you could incur fringe benefits tax. What type of benefits attract FBT? Anything you provide to a staff member other than their salary or superannuation can attract FBT. Typical examples include a car, a car bay at work, housing, low interest loans, entertainment (even with clients or other staff), holidays, gifts, food, alcohol, school fees, health insurance, gym fees, and airfares. If you let your staff garage the company car at their house the car will be taken as a private benefit. A bus, truck, motorcycle or one tonne van/ute is not a car but can still attract FBT. Fringe Benefits Tax (FBT). We have compiled the following information to help clarify Fringe Benefits Tax obligations for employers. What type of staff incur FBT? All staff can attract fringe benefits tax. This includes the owners of privately held businesses. How do you calculate FBT? If you provide the staff member with $10,000 of benefit (like a necklace), and you claim the GST on the benefit, you will pay $9,600 in fringe benefits tax. If you can’t claim GST you will pay $8,691 in FBT. The FBT payable itself is tax deductible (unlike income tax which is not tax deductible). When is the tax due? The FBT year ends on 31 March. The tax return is due 21 May. Large FBT payers will make regular instalments of FBT in their BAS. Is there a threshold for small benefits? Infrequent and irregular entertainment under $300 might be exempt. Otherwise all benefits must have a return lodged no matter how small. Small businesses have an exemption for car parking. How can I reduce FBT? If your staff repay you in full for the cost of the benefit provided you can reduce the FBT. This is often done for the owners of privately held businesses. If the benefit is one of the many exempt benefits you can reduce the cost as well. Remote housing provided to a mineworker is an example of an exempt benefit. If the benefit is tax deductible it will not attract FBT. It only applies to private benefits. There are special rules to calculate the private use of a motor vehicle.
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Transcript of Fringe benefits tax overview
Fringe Benefits Tax
What is Fringe Benefit Tax?FBT is an additional tax payable by the employer. If you give your staff anything other than a salary (or superannuation) you could incur fringe benefits tax.
What type of benefits attract FBT?Anything you provide to a staff member other than their salary or superannuation can attract FBT.
Typical examples include a car, a car bay at work, housing, low interest loans, entertainment (even with clients or other staff), holidays, gifts, food, alcohol, school fees, health insurance, gym fees, and airfares.
If you let your staff garage the company car at their house the car will be taken as a private benefit.
A bus, truck, motorcycle or one tonne van/ute is not a car but can still attract FBT.
Fringe Benefits Tax (FBT). We have compiled the following information to help clarify Fringe Benefits Tax obligations for employers.
What type of staff incur FBT?All staff can attract fringe benefits tax. This includes the owners of privately held businesses.
How do you calculate FBT? If you provide the staff member with $10,000 of benefit (like a necklace), and you claim the GST on the benefit, you will pay $9,600 in fringe benefits tax.
If you can’t claim GST you will pay $8,691 in FBT.
The FBT payable itself is tax deductible (unlike income tax which is not tax deductible).
When is the tax due?The FBT year ends on 31 March. The tax return is due 21 May.
Large FBT payers will make regular instalments of FBT in their BAS.
Is there a threshold for small benefits? Infrequent and irregular entertainment under $300 might be exempt. Otherwise all benefits must have a return lodged no matter how small.
Small businesses have an exemption for car parking.
How can I reduce FBT?If your staff repay you in full for the cost of the benefit provided you can reduce the FBT. This is often done for the owners of privately held businesses.
If the benefit is one of the many exempt benefits you can reduce the cost as well. Remote housing provided to a mineworker is an example of an exempt benefit.
If the benefit is tax deductible it will not attract FBT. It only applies to private benefits.
There are special rules to calculate the private use of a motor vehicle.
Craig SeddonDirector
D 08 9223 8871 M 0414 424 969
Level 1 45 Royal Street East Perth WA 6004
T 08 9221 8811 F 08 9223 8832
westcourt.com.au
Ross ForresterPrincipal
D 08 9223 8831 M 0412 570 692
DISCLAIMER The above information is not advice and is for general discussion purposes only. You should seek advice
from a registered tax agent in regards to your personal situation.
Fringe Benefits Tax
Westcourt is a mid-sized practice of accountants and business consultants, centrally located in East Perth. We specialise in providing financial and strategic advice to private business. At Westcourt, we take the time to get to know our clients so that we can recommend the best solutions for their business.Our team has an in-depth knowledge of the accounting regulations, financial strategies and tax laws relating to private business. This allows us to provide our clients with first-rate advice and superior solutions.
Contact us today.
Anything else? FBT and the value of the benefit provided is part of your total wages for payroll tax purposes ($750,000 WA wages threshold).
Some type of benefits have to be shown on the employees PAYG Withholding statement.
Where to from here? If you have a liability you should contact us to discuss your options.
