It is a common practice for employers to provide additional items on top of an employee’s salary or wage.
Some of these items could include.
- Car or other vehicles owned or leased by the business available to employees for private use.
- Loans provided at reduced interest rates to employees.
- Employee released from an owed debt.
- A non-business expense incurred by an employee paid for, or reimbursed.
- A house or unit of accommodation provided to your employees.
- Employees provided with living-away-from home allowances.
- Entertainment provided by the way of food, drink or recreation to your employees.
- New salary package arrangements for any employees or any employees on existing salary package arrangements.
- Employees provided with goods at a lower price than they are normally sold to the public.
As an employer, if you have provided any of the above items to your employees then you could be liable for Fringe Benefits Tax. Fringe Benefits Tax (FBT) is a tax paid by employers on the value of certain benefits that have been provided to their employees’ in relation to their employment. These benefits or ‘payments’ are considered separately to salary or wages.
The Fringe Benefits Tax (FBT) year ends on 31 March each year and payment of any necessary FBT is due by 21 May. Eligible benefits that are paid must be recorded on employees’ payment summaries for the income year ending 30 June of the same year.
As a business owner, it is your responsibility to determine whether you have provided fringe benefits to your employees during the course of the FBT year, and consequently, whether you are liable to pay FBT on those benefits.
If you have provided any of the above items to your employees since 1 April 2009 you may be liable for the payment of FBT. For further advice in relation to your business’ FBT liabilities or for any related queries such as company tax returns contact The Quinn Group on 1300 QUINNS (784 667) or click here to submit an online enquiry.