FBT applies even if the benefit is provided by a third party under an arrangement with the employer. FBT is separate to income tax and is calculated on the taxable value of the fringe benefit. Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits.
If you are a Director and conduct your business through a company or a trust, you may be an employee of the company or trust. This may mean you are providing fringe benefits to yourself and so you need to understand your company or trust FBT obligations. There are a few strategies to reduce the amount of FBT you employer pay, we have listed some below:. You should always consult a specialist accountant when considering your options for reducing liability in your business.
If you are looking at giving your employee a cheap loan it is important to ensure that you declare it on FBT and that it is correctly documented between employee and employer as well as your FBT return. Grossing-up means increasing the taxable value of benefits you provide to reflect the gross salary employees would have to earn at the highest marginal tax rate including Medicare levy to buy the benefits after paying tax. If you need any tax or accounting advice, please call our office today on 07 , or use our contact form.
We value your privacy as much as you do. You can consent to processing for these purposes configuring your preferences below. If you prefer to opt out, you can alternatively choose to refuse consent. Please note that some information might still be retained by your browser as it's required for the site to function. For more details, please refer to our privacy policy. What counts as a fringe benefit for tax purposes? All employers provide some sort of financial compensation to their employees, but only certain benefits are taxed, including: A company car Gym memberships provided by the employer Entertainment such as tickets to concerts or sporting events School fees paid by the employer Fringe benefits tax exemption On the other hand, the following are not considered to be fringe benefits, and are therefore exempt from FBT: Salary and wages which are taxed separately under payroll tax Shares Dividends Employer contributions to superannuation funds Payments made when terminating employment Fringe benefits tax return As with many other taxes, businesses liable for FBT are required to lodge an FBT return.
Related terms Company tax Income Tax Payroll tax.
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