What is Fringe Benefits Tax (FBT)?
Fringe Benefits Tax (FBT) is a tax payable by employers for benefits paid to an employee or the employees associate. FBT is separate from income tax and is based on the taxable value of the various benefits provided. Common examples where FBT is payable is the provision of motor vehicles, entertainment expenses and payment of health fund premiums.
When replacing a portion of a cash salary for non-cash benefits, income tax is replaced with Fringe Benefits Tax (FBT) as the applicable tax for the new benefits. Unlike income tax, FBT is paid by the employer however in most cases this cost will be passed to the employee and packaged along with the other benefit costs. FBT is not payable on laptops or electronic diaries as these are exempt benefits. FBT is not paid on additional superannuation payments made to the employee’s complying super fund account as these are not treated by the Australian Tax Office as fringe benefits. FBT is payable on motor vehicles. There are two methods for calculating FBT on motor vehicles, the Operating Cost Method and the Statutory Method. In most cases the Statutory Method is the appropriate choice. Using this method the amount of FBT payable depends on the value of the car and the kilometres travelled each year. Once the value of the car is determined (at time of purchase) it does not change. The only
When replacing a portion of a cash salary for non-cash benefits, income tax is replaced with Fringe Benefits Tax (FBT) as the applicable tax for the new benefits. FBT is will be passed on to the contractor and packaged along with the other benefit costs. FBT is not payable on laptops or electronic diaries if these are pre dominantly for work purposes as these are exempt benefits. FBT is not paid on additional superannuation payments made to the employee’s complying super fund account as these are not treated by the Australian Tax Office as fringe benefits. FBT is payable on motor vehicles. There are two methods for calculating FBT on motor vehicles, the Operating Cost Method and the Statutory Method. In most cases the Statutory Method is the appropriate choice. Using this method the amount of FBT payable depends on the value of the car and the kilometres travelled each year. Once the value of the car is determined it does not change. The only variable that effects the amount of FBT pay
