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Contents
What is FBT?
FBT is a tax payable by employers who provide employees with fringe benefits (non-cash benefits) that are outside their normal salary and superannuation.
The FBT year runs from 1 April to 31 March, with a lodgments and payments due date of 21 May, or 25 June if lodging through a tax agent.
Common examples of Fringe Benefits are:
- Using business vehicles (cars) for private use
- Providing loans
- Covering private expenses
- Paying for car parking
- Providing entertainment
- Providing goods/services from the business
- Living Away From Home Allowances (LAFHA)
If fringe benefits are provided to the employee, the employer must value the benefits in accordance with the legislation and pay FBT at the rate of 47%.
FBT Exemptions or Concessions
Employers can reduce or eliminate their FBT liability by accessing a number of exemptions & concessions.
Common examples of FBT exemptions or concessions are:
- Providing employees certain items that are primarily used for their employment (i.e. laptops, mobile phones etc.)
- Providing minor fringe benefits where the benefit is less than $300 and would be considered unreasonable to be treated as a fringe benefit.
- Various concessions for Not-For-Profit Organisations.
Car Fringe Benefit
Car Fringe Benefits are probably the most common fringe benefit that employers provide to their employees. If an owned or leased business car is made available for the private use of an employee, such as travelling to and from home, this can result in a Car Fringe Benefit.
If you provided a Car Fringe Benefit, it is recommended to do the following:
- Maintain a valid logbook recording their personal and business travel.
- Record the closing odometer of their vehicle on 31 March of each year.
You can find details about Car Parking Fringe Benefits here.
What should I do now?
If you have provided any fringe benefits to employees during the last twelve months, it is advisable to speak to a trusted accountant or business adviser on how the FBT rules apply to your business and what record keeping requirements need to be satisfied.
In addition, if your business offers salary packaging arrangements to employees, now is a good time to review those arrangements to ensure they are considered 'effective salary sacrifice arrangements'.
Our team at BLG Business Advisers are available if you need some assistance so please talk with us today.
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