The Fringe Benefits Tax (FBT) year ended 31 March 2017. It is now time for businesses to determine if they have an FBT exposure and if so start to collate the relevant information in order to complete an FBT return for the year.
What is Fringe Benefits Tax?
FBT is a tax that employers are required to pay if they have provided benefits to employees or an associated party as part of or in addition to a wage or salary package.
The FBT year runs from the 1st of April to the 31st of March.
The following are some examples of fringe benefits:
- Providing a company car for an employee’s private use
- Paying for or reimbursing an employee’s private expenses
- Providing a discounted loan to an employee
- Benefits received from a salary sacrifice arrangement with an employee
- Providing an employee with free tickets or other forms of entertainment
FBT is calculated on the taxable value of the fringe benefits provided, in accordance with legislation. The FBT rate for the year ended 31 March 2017 is 49%.
It is important to be aware that some businesses, including not for profit charities, may be eligible for exemptions and/or concessions which eliminate or reduce FBT liabilities. In most cases FBT is not allocated to contractor or volunteer benefits.
I think my business is required to submit an FBT return, what should I do now?
Determining FBT is a complex process. Therefore before completing a return you should seek advice that is relevant to your business and specific circumstances.
For assistance please see our initiation letter and associated documents by clicking here or contact us on (02) 4655 7711.