Fringe Benefits Tax (FBT): A quick guide:

You’ve heard of the term a lot, but do you really understand the ins and outs of FBT (Fringe Benefits Tax)? We thought that a short guide on FBT that decodes the jargon and explains how it may affect you, might be a useful read. 

Fringe Benefits are provided to an employee. They are essentially non-cash advantages of working with a company. Examples include:

  • Car park privileges
  • Gym memberships
  • Meal or recreation expenses
  • Some personal use of a business car

A Fringe Benefit is separate from an employee’s wage and is taxed separately from their income. Since a business could essentially pay an employee through Fringe Benefits and therefore avoid paying tax, a Fringe Benefits Tax has become a reality. 

There are exemptions to FBT. Various industries and benefits are exempt or the tax itself reduced. One common example is the expense of a laptop or mobile phone that would be used primarily for business purposes. 

Small businesses with a turnover of less than $50 million can enjoy FBT exemption on car parking also. 

If you would like a more exhausting list of FBT exemptions and reductions, then do have a chat with one the team here at Accounting Tax Solutions, who can provide you with information tailor-made to your industry and business. 

It may be wise to lodge a Fringe Benefits tax return, even if you believe the taxable value itself to be nil. This is because after you lodge the return, the ATO is given 2 years to review it. If you do not lodge anything, then this leaves an open ended time frame for the ATO to go over your FBT obligations. 

You are welcome to complete a FBT – notice of non-lodgement for a year as well. Do speak with us about what might be best for your personal situation. 

The due date for filing a FBT return is the 21st May. If you are using a tax agent and it is lodged electronically, this is extended until 25th June. 

As it is with everything tax related, it is important to keep meticulous records of your expenses and fringe benefits, including how you calculate the tax if applicable. Should the ATO wish to raise any queries, the process is a lot more seamless should you have everything well recorded. 

If you have any questions regarding FBT, then do not hesitate to get in touch with one of our knowledgeable team members here at Accounting Tax Solutions. Call our office today on 07 5559 1200