FBT is paid by employers for the benefits they provide to the employees, family or Other associates. Its employer’s responsibility to self-assess their FBT liability for the year (1 April to 31 March) and submit the FBT return. Employers will be eligible to claim a deduction for the cost of providing benefits and for the FBT they pay.
FBT purpose employees include a
- Future, present or past employee
- Director of a company
- Beneficiary of a trust who works with the business
Examples of FBT
- providing the employee with a discounted loan
- employee’s gym membership
- Employee to use a work car for personal reasons
- Giving benefits under a salary sacrifice arrangement with an employee
How to reduce FBT?
- Provide benefits that are tax-deductible
- Using employee contributions
- Provide a cash bonus
- Provide benefits exempt from FBT
Calculating your FBT
- Step 01 – Work out the taxable value of each benefit provided to employees
- Step 02 – Work out the values you can claim a GST credit
- Step 03 – Work out the grossed-up taxable value of the benefits
- Step 04- Work out the taxable value of benefits which you can’t claim a GST credit
- Step 05 – Work out the grossed-up taxable value by multiplying the total taxable value Of the benefits that you can’t claim a GST credit
- Step 06 – Add the grossed-up amount from steps 03 and 04
- Step 07 – Multiply the total fringe benefits taxable amount by the FBT rate. This will be the total amount you have to pay.
Registering for FBT
- Online – Using the ABN registration service
- Via phone
- Through registered tax agent
- Completing the paper form
- By lodging your annual FBT return
Reporting, lodging and paying FBT
- Employers required to lodge an FBT return if they have a liability during the FBT year (1 April to 31 March)
- Due to COIVID 19, the lodging date was deferred in the previous FBT year
- If registered for FBT but don’t need to lodge a return, can complete the Fringe benefit tax -notice if non-lodgement.