Fringe Benefit Tax

The Fringe Benefit Tax (FBT) is a tax that employers are required to pay if they have provided benefits to employees, or an associated party, as part of or in addition to a wage or salary package.

The FBT year runs from the 1 April to 31 March. We created a list of some examples of fringe benefits for you:

• Providing a company car for an employee’s private use
• Paying for or reimbursing an employee’s private expenses
• Providing a discounted loan to an employee
• Benefits received from a salary sacrifice arrangement with an employee
• Providing an employee with free tickets or other forms of entertainment

FBT is calculated on the taxable value of the fringe benefits provided, in accordance with legislation. The FBT rate for this year (ended 31 March 2017) is 49%.

It is important to be aware that some businesses, including not for profit charities, may be eligible for exemptions and/or concessions which eliminate or reduce FBT liabilities. In most cases FBT is not allocated to contractor or volunteer benefits.

If you think your business is required to submit an FBT return, contact us today as determining FBT is a complex process. Before completing a return you should seek advice that is relevant to your business and specific circumstances.