What employee benefits apply for FBT
When an employer provides certain benefits for their staff, they are required to pay Fringe Benefits Tax (FBT). Employers pay FBT on the benefits they present to employees and their families or other associates. The benefit may be in addition to, or part of, an employee’s salary or wages package.
FBT is separate from income tax and is calculated on the taxable value of the benefits that have been provided to employees. The type of fringe benefits employers must pay FBT on include:
- Vehicles for private use: if an employer makes a car they own or lease available for the private use of an employee, they may have to provide a car fringe benefit.
- Loans: employers may have to provide a loan fringe benefit if they give their employees a loan, possibly at a discount, and charge no interest or a low rate of interest.
- Entertainment: this refers to situations such as providing entertainment in the form of free tickets to concerts. This provision can include providing food and drink, accommodation or travel in connection with the entertainment.
- Membership: paying an employee’s membership to a gym.
There are also a number of employee benefits that are exempt from FBT. These can be because the benefits are primarily used by workers during employment or they are significantly similar to another item already being claimed. These exemptions can include the following work-related items:
- Portable electronic devices (mobile phones, laptops, tablets, portable printers and GPS navigation receivers)
- Computer software
- Protective clothing
- Tools of trade
Businesses will need to assess their own tax liability within each FBT year, from 1 April to 31 March. Returns must be lodged before the due date on 21 May.