As a business owner, it is your responsibility to determine whether you have provided fringe benefits to your employees during the course of the FBT year, and consequently, whether you are liable to pay FBT on those benefits. This includes fringe benefits provided to you; a relative; an employee or director; and relatives of employees or directors.
Fringe Benefits Tax (FBT) is a tax paid by employers on the value of certain benefits that have been provided to their employees’ in relation to their employment. These benefits or ‘payments’ are considered separately to salary or wages.
This handy FBT liability checklist can help you to quickly identify whether you may liable for FBT in the current period.
If you answer “yes” to any of the below questions in our FBT liability checklist, then you may be liable for FBT and should contact the team of expert tax accountants and lawyers at The Quinn Group for further advice.
In the current FBT year, since 1 April 2023:
- Cars or Other Vehicles – Do you make cars or other vehicles owned by the business available to employees for private use including a car garaged at the employee’s home?
- Reduced Rate Loans – Do you provide loans at reduced interest rates to employees?
- Released Employee Debt – Have you released an employee from an owed debt?
- Paid or Reimbursed Employee Loan – Have you reimbursed or paid an employee loan?
- Paid or Reimbursed Expenses – Have you paid for, or reimbursed, an expense incurred by an employee? eg. mobile or internet usage.
- Provided House or Accommodation – Do you provide a house or unit of accommodation to your employees?
- Living-Away-From-Home Allowances – Do you provide employees with living-away-from-home allowances?
- Entertainment – Do you provide entertainment by the way of food, drink or recreation to your employees?
- Tax-Exempt & Provided Food, Drink or Accommodation – Are you a tax-exempt organisation that has provided food, drink or accommodation to employees?
- Property & Car Parking – Have you provided property and car parking facility either free or at a discount, to employees?
- Salary Package Arrangements – Do any of your employees have a new or existing salary package arrangement in place?
- Provided Low Price Goods – Have you provided your employees with goods at a lower price than they are normally sold to the public?
The Fringe Benefits Tax (FBT) year ends on 31 March each year and payment of any necessary FBT is due by 21 May. Eligible benefits (greater than $2000) that are paid must be recorded on employees’ payment summaries for the income year ending 30 June of the same year.
Employees who have these benefits reported on their payment summary will not be directly liable for additional income tax, but it may affect their Medicare surcharge liability or child support payments (if applicable). Where related parties, for example a husband and wife, have both had use of a fringe benefit, care needs to be exercised in determining to whom the fringe benefit should be allocated.
As an employer, if you have answered “yes” to any of the above questions in the FBT liability checklist, which means that you have provided any of the above items to your employees between 1 April 2023 and 31 March 2024, then you could be liable for Fringe Benefits Tax.
For expert advice regarding your Fringe Benefits Tax liability, please contact our team of experienced tax accountants at The Quinn Group by submitting an online enquiry form or calling us on 1300 QUINNS or +61 2 9223 9166 to arrange a teleconference or appointment.
For more information regarding FBT liability, exemptions and record keeping, you might like to read Fringe Benefits Tax Explained.
