The Fringe Benefits Tax year comes to an end on 31st March.
Are you aware what might trigger this extra tax for your business and just how costly it could be?
ATO says:
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.
Your tax accountant can help you with the calculations and documentation.
What is a fringe benefit?
A fringe benefit is like a payment to/for 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.
FBT can be quite costly, that employee gift might cost you a lot more than you anticipated or budgeted for! This example from the ATO website shows the tax is approx the same as the original expense, essentially doubling your cost.
More from the ATO https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00001
Not sure if you might be caught out by this extra tax? Speak to your tax agent about your situation and what exemptions might apply. They may also assist you to make smarter decisions to avoid future lodgements and liabilities.
