Fringe benefits are benefits paid to an employee (or associate) in respect of employment, such as a car, car parking, low interest loan and payments of private expenses.
Fringe Benefits Tax (FBT) is the tax payable on the provision of these benefits. FBT is separate from income tax and is calculated on the taxable value of the various benefits provided.
If your business provides fringe benefits to employees then you need to:
- calculate how much FBT you have to pay
- keep the necessary FBT records
- register for FBT
- report fringe benefits on your employees’ payment summaries
- lodge a return and pay FBT to the Australian Taxation Office (ATO)
- understand which benefits are exempt from FBT.
