Attracting and retaining good staff is essential for your business. If you’ve given your employees perks and benefits such as car parking or gym memberships, you should consider the Fringe Benefit Tax (FBT) implications.
These extras can be a great bonus on top of salary and wages – but they can attract an FBT liability.
What kinds of benefits attract Fringe Benefit Tax? Everything on this list could be subject to FBT:
- allowing an employee to use a work car, including a dual cab ute, for private purposes
- tickets to concerts, shows or sports events
- reimbursed school fees
- discounted loans
- salary sacrifice arrangements.
On the other hand, the following aren’t considered fringe benefits:
- salary and wages
- employer payment to complying super funds
- shares and rights given under approved employee share acquisition schemes
- benefits provided to volunteers and contractors.
If you’re giving staff extras that attract FBT, ensure you take these 4 steps:
- Identify the types of fringe benefits you provide.
- Determine the taxable value using approved valuation methods relevant to each fringe benefit.
- Lodge an FBT return by the due date – you may have longer if your Arabon accountant lodges electronically for you.
- Keep records that demonstrate your calculations and support your FBT position.
You can visit ato.gov.au/FBT or talk to your Arabon accountant for the best advice on managing your FBTs.
Source: ATO Small Business Showroom
