Fringe Benefits Tax (FBT) Check for Employers

Fringe benefits tax (FBT) is paid by employers, not employees, on most non-cash benefits given to employees or their associates in connection with their employment. It is charged under the Fringe Benefits Tax Assessment Act 1986 (FBTAA) and the Fringe Benefits Tax Act 1986 at 47% of the grossed-up taxable value of the benefits. The FBT year runs from 1 April to 31 March, and if you have an FBT liability you must lodge an FBT return and pay by 21 May (later if lodged electronically through a tax agent). Common benefits include private use of a work car, paying an employee’s personal bills, low-interest loans, car parking and entertainment such as Christmas parties and gifts.

Many benefits can be exempt or reduced if you structure and record them properly: minor benefits under $300 that are infrequent and irregular (FBTAA s.58P), work-related items such as laptops and phones (s.58X), eligible electric cars below the luxury car tax threshold (s.8A), and parties held on your premises on a working day for current employees. Getting it wrong means back-dated FBT, the general interest charge and administrative penalties, and missing reportable fringe benefits on employees’ income statements affects their Medicare levy surcharge, child support and government benefits. The ATO regularly targets car benefits and incorrect use of exemptions.

Use this free tool to check whether your business owes fringe benefits tax on cars, parties, gifts and other perks, which exemptions you can use, and whether your FBT return and income statement reporting are on track.