Fringe Benefits Tax (FBT)
Fringe benefits
tax (FBT) is a tax paid on certain benefits employers provide to their
employees or their employees’ associates (typically family members)
in place of salary or wages. FBT is separate from income tax and is
based on the taxable value of the various fringe benefits provided.
Basically,
a fringe benefit is a benefit provided to an employee (or their associate)
because that person is an employee. Benefits can be provided by an employer,
an associate of the employer, or by a third party under an arrangement
with the employer. An employee can be a current, future or former employee.
Fringe benefits
include rights, privileges or services. For example, you provide a fringe
benefit when you:
allow an employee to use a work car for private purposes
give and
employee a cheap loan, or
pay an employee's
private health insurance costs
Some benefits
such as laptop computers (one per employee each FBT year) and mobile
phones that are primarily used for work are exempt from FBT.
The following
are not fringe benefits:
payments of salary or wages
approved
employee share acquisition schemes
employer
contributions to complying superannuation funds
eligible
termination payments (e.g. a company car given or sold on termination),
or
certain
benefits provided by religious institutions to their religious practitioner.