Fringe Benefits

What it is, how it applies and what you need to do as an Employer!

 What is Fringe Benefits Tax?

  • Fringe Benefits tax (FBT) is a tax paid by employers on certain benefits provided to their employees, or to their employees’ family or other associates.
  • FBT is separate to income tax. It's calculated on the taxable value of the fringe benefit.
  • As an employer, you must self-assess your FBT liability for the FBT year (1 April to 31 March). If you have an FBT liability, you must lodge an FBT return and pay the FBT you owe.

 What is a Fringe Benefit?

A fringe benefit is like a payment to an employee, but in a different form to salary or wages.

There are different types of fringe benefits. Examples include:

  • allowing an employee to use a work car for private purposes
  • car parking
  • paying an employee's gym membership
  • providing entertainment by way of free tickets to concerts
  • reimbursing an expense incurred by an employee, such as school fees
  • giving an employee a discounted loan
  • giving benefits under a salary sacrifice arrangement with an employee.

Not a Fringe Benefit.

Examples that are not fringe benefits are listed on the ATO website.


Who receives Fringe Benefits?

FBT applies to fringe benefits provided to your employees, or to your employees' families or other associates.

For FBT purposes, an employee includes a:

  • current, future or past employee
  • director of a company
  • beneficiary of a trust who works in the business.

If you are a sole trader or a partner in a partnership, you are not an employee. Benefits you provide to yourself are not subject to FBT.

Your clients are not employees. Benefits you provide to clients, such as entertainment, are not subject to FBT.

  • Who Pays?
  • How much FBT do you pay?
  • Can you claim deductions and GST credits?

The ATO provides full information on the above matters.


What do you need to do as an Employer?

If you are an Employer, the ATO lists 7 steps to guide you. Full details are provided on the ATO website.

FBT Resource - a guide for Employers is also available. 


There you have it!

Fringe Benefits, Fringe Benefits Tax!   

Not sure if or how this affects you as an Employer or Employee contact Blackburn Accounting we are ready to help you.