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What Is Fringe Benefits Tax?





Fringe Benefits Tax (FBT) in Australia is a tax employers pay on certain benefits they provide to their employees or their employees' associates (typically family members). This tax is separate from income tax and is based on the taxable value of the fringe benefits provided.

 

FBT Year

The FBT year runs from 1 April to 31 March.

 

FBT Rate

The FBT rate for the 2024-2025 year is 47%.

 

Common Types of Fringe Benefits

  • Cars: Benefits related to the private use of a company car.
  •  Loans: Low or interest-free loans provided to employees.
  •  Housing: Providing accommodation to employees.
  •  Expense Payments: Reimbursing an employee’s personal expenses.
  •  Meal Entertainment: Meals and entertainment provided to employees.
  •  Living Away From Home Allowance (LAFHA): Allowances provided to employees who need to live away from home.

 

Exempt Benefits

Some benefits are exempt from FBT. Here are a few examples:

  • Minor benefits (less than $300 and infrequent).
  • Work-related items (portable electronic devices, tools of trade).
  • Certain car parking benefits.
  • Taxi travel directly between work and home.

  

Compliance Tips

        

  • Review Benefits: Regularly review the types of benefits provided to employees to ensure compliance.
  • Keep Detailed Records: Maintain detailed records of all benefits provided, how the taxable value is calculated, and any employee contributions. E.g. maintain an accurate logbook for each company vehicle.
  • Stay Updated: FBT rules can change, so it’s important to stay informed about any updates from the Australian Taxation Office (ATO).

 

Further Support

You can find helpful resources and guidance on FBT on the ATO website, including calculators and explanations of different types of benefits. Employers can refer to these resources to ensure they meet their FBT obligations accurately.

For the most accurate and up-to-date information, refer to the Australian Taxation Office's website.

The ATO regularly conduct review and audit to identify employers who may not be compliant. Therefore, understanding FBT and staying compliant can help employers avoid penalties and ensure they are providing fringe benefits in a tax-efficient manner. If you need further guidance in this area, please contact our firm.

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