Business Tax Services - Fringe Benefits Tax (FBT)

What is Fringe Benefits Tax (FBT)?

A fringe benefit is a 'payment' to an employee, but in a different form to salary or wages.

According to the fringe benefits tax (FBT) legislation, a fringe benefit is a benefit provided in respect of employment. This effectively means a benefit provided to somebody because they are an employee. The 'employee' may even be a former or future employee.

An employee is a person who is entitled, or has been entitled, to receive, salary or wages.

If your business provided any Fringe Benefits you will need to lodge a Fringe Benefits Tax (FBT) Return. This includes fringe benefits provided to you; a relative; an employee or director; and relatives of employees or directors.

Fringe Benefit Tax Checklist

If you answer yes to any of these checklist items below, you may be liable to pay Fringe Benefits Tax.

• Do you make cars or other vehicles owned by the business available to employees for private use including a car garaged at the employee's home?

• Do you provide loans at reduced interest rates to employees?

• Have you released an employee from an owed debt?

• Have you paid for, or reimbursed, an expense incurred by an employee?

• Do you provide a house or unit of accommodation to your employees?

• Do you provide employees with living-away-from-home allowances?

• Do you provide entertainment by the way of food, drink or recreation to your employees?

• Are you a tax-exempt organisation that has provided food, drink or accommodation to employees?

• Have you provided property, either free or at a discount, to employees?

• Do any of your employees have a salary package arrangement in place?

• Have you provided your employees with goods at a lower price than they are normally sold to the public?

How can Fringe Benefit Tax (FBT) affect employees?

If you are required to declare on your "Payment Summaries" (formerly known as "Group Certificates"), details of most fringe benefits provided to each employee during the year. Employees who have these benefits reported on their group certificates will not be directly liable for additional income tax, but it may affect their Medicare surcharge liability or, if applicable, child support payments. Where related parties, for example a husband and wife, have both had use of a fringe benefit, care needs to be exercised in determining to whom the fringe benefit should be allocated.

Quinns can help you with all your business tax services, including how Fringe Benefits Tax (FBT) affects you and your employees. If you would like to make an appointment or you would like to find out more information, please submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166.

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