As an employer, if you have provided Fringe Benefits Tax (FBT) benefits to your employees (including their associates) this FBT year, you may be required to pay fringe benefits tax. Remember to consult accountants in Sydney for guidance on your obligations.
FBT benefits include a company car, private health insurance coverage, holidays, low-interest loans, meals and entertainment.
Suppose your business has previously lodged an FBT return with the ATO. In that case, your client manager will contact you soon to request any relevant information and help you complete this year’s FBT return (from 1 April 2015 to 31 March 2016).
If we assist you with lodging your FBT return, the payment is due on 28 May 2016, and lodgement will be on 25 June 2016.
Following is a list of initiatives that you as an employer can implement to reduce your FBT:
- Offering exempt benefits to your employees – examples of this include:
- Providing “minor and infrequent” benefits where the GST inclusive value of each benefit is less than $300.
- Providing exempt work-related items such as:
- mobile phones that are primarily for use in the employee’s employment
- items of protective clothing required for the employee’s employment
- a briefcase
- a calculator
- a tool of the trade
- an item of computer software for use in the employee’s employment
- an electronic diary or similar item, and
- laptop or similar portable computer.
- Get the employee to share the cost of the FBT benefits by getting them to enter into an “employee contribution” arrangement;
- Apply the otherwise deductible rule to the benefits provided where possible.
Documents that you should remember to get your employee to complete before or by 31 March 2016 include the following:
- Car odometer declaration/logbook
- Loan benefit declaration
- Fuel and oil expenses declaration
- Living away from the home declaration
- Exempt vehicle declaration (for particular utes and panel vans)
- Residual non-private use declaration – company car with $Nil FBT
A table summarises typical FBT rates and amounts for this FBT year.
| Item | 2016 FBT Year |
| FBT tax rate | 49% |
| Gross-up factor – type 1 | 2.1463 |
| Gross-up factor – type 2 | 1.9608 |
| Minor benefit exempt threshold | Less than $300 |
| Car parking threshold | $8.37 |
| Long Service Award exempt threshold | Generally, $1,000 (plus extra for each additional yrs. of service) |
| In-house benefit exempt | $1000 per employee |
| FBT record-keeping exemption threshold | $8164 in total fringe benefits provided |
| FBT reportable threshold | $2,000 for each employee |
| Benchmark loan rate | 5.65% |
| FBT-exempt (hospitals) | $17,667 grossed-up taxable value per employee |
| FBT-exempt (PBIs and Charities) | $31,177 grossed-up taxable value per employee |
If you have any questions or want to know more about FBT, please do not hesitate to contact us.
Kreston Stanley Williamson Team
*Correct as of April 2016
Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
