Do you provide perks to your team?
You probably need to submit an FBT return in the next couple of weeks.
No idea what could be captured? Speak to your tax accountant ASAP – gym membership, tickets to the footy, fancy meals, company car used for personal trips can all be captured.
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.
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.
To work out how much FBT to pay, you ‘gross-up’ the taxable value of the benefits you’ve provided. This is equivalent to the gross income your employees would have to earn, at the highest marginal tax rate (including the Medicare levy), to buy the benefits themselves.
Example
Jenni runs a small consulting firm. She provides her employee, Anton, with a gym membership that costs $1,100 (including $100 GST).
This is a fringe benefit. Jenni works out the FBT as follows:
Taxable value of the benefit ($1,100)
× the gross-up rate (for a GST-inclusive fringe benefit the rate is 2.0802)
× the FBT rate (47%)
= FBT of $1,075.46.
Jenni must prepare and lodge an annual FBT return, and pay her FBT liability.
She may also need to calculate and report Anton’s reportable fringe benefits amount in his end-of-year payment information.
You may receive a Failure to lodge (FTL) on time penalty if you have an obligation to lodge or report by a particular date, but don’t lodge by that due date.
An automated penalty system applies FTL penalty to late-lodged returns, reports and statements, including:
– activity statements
– tax returns
– FBT returns
– PAYG withholding annual reports
– Single Touch Payroll reports
– annual GST returns and information reports
– taxable payment annual reports.
We may apply FTL penalty manually. This is usually in situations of escalating non-compliance – for example, where a taxpayer has not lodged after a request to do so.
Read more here: https://www.ato.gov.au/law/view/document?DocID=SAV%2FFBTGEMP%2F00001
Avoid fines and penalties – review your situation, ask your accountant – act now!
