Fringe Benefits Tax.
How FBT can help your business.
There's an old business adage that states that your employees are your biggest asset. In this tough hiring environment, offering perks can make the difference between hiring your next employee or missing out.
The following is a list of possible fringe benefits you could offer your employees:
- 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
Fringe Benefits Tax (FBT) is a tax imposed on employers for specific perks granted to their employees or their employees’ relatives or affiliates.
FBT operates independently from income tax and is determined based on the assessable value of the fringe benefit.
As an employer, it is your responsibility to evaluate your FBT obligation for the FBT year spanning from 1 April to 31 March. If you are liable for FBT, you are required to submit an FBT declaration and settle the owed FBT amount.
Do you have any questions?
Why you need to lodge an FBT return.
If you provide taxable fringe benefits to your employees, such as company cars, health insurance, or entertainment benefits, you're generally required to file a Fringe Benefits Tax (FBT) return with the Australian Taxation Office (ATO). The need to file an FBT return depends on whether the benefits you provide are taxable and the calculated taxable value of these benefits, which is essentially the cost to you minus any contributions by the employees.
However, not all fringe benefits trigger the need for an FBT return. Exemptions apply to certain work-related items like laptops or minor benefits valued under $300. If your provided benefits fall within these exempt categories, you might not need to file. To ensure compliance and avoid any potential issues, consider seeking advice from a tax professional who can provide tailored guidance based on your specific circumstances.
Late-lodgement and non-lodgement of Fringe Benefits Tax penalties.
Failure to lodge on time (FTL)
A penalty of $222 per 28-day period (or part thereof) may apply for each FBT return that is lodged late, up to a maximum of $1,110 per return.
General interest charge (GIC)
Interest is charged on any unpaid FBT liability from the due date until the amount is paid in full. The GIC rate is set by the ATO and is updated quarterly.
Administrative penalties
Additional penalties may apply for non-compliance with FBT obligations, such as failing to keep adequate records, making false or misleading statements, or failing to provide payment summaries to employees.
Prosecution
In severe cases of non-compliance or fraud, criminal charges may be brought against the employer or individual responsible for the breach.
It's important for employers to understand their FBT obligations and meet their reporting and payment deadlines to avoid penalties and interest charges.
Lodge your FBT with Causbrooks.
At Causbrooks, we’re dedicated to helping businesses with their taxation and accounting needs. If you’d like to discuss your own situation, please complete the form below.
Our team of dedicated accountants is committed to providing the best possible experience for our clients, and we believe that our combination of longevity and experience in the industry and our commitment to embrace innovation and change make us uniquely qualified to do so.
Disclaimer.
Any advice contained in this document is general advice only and does not take into consideration the reader’s personal circumstances. Any reference to the reader’s actual circumstances is coincidental. To avoid making a decision not appropriate to you, the content should not be relied upon or act as a substitute for receiving financial advice suitable to your circumstances.
Tax implications to consider for FBT.
Fringe benefits can have significant tax implications for both employers and employees.
Here are some of the key tax implications to consider:
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