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.

What is a fringe benefit?

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.