Fringe Benefits Tax (FBT)

Fringe benefits are an important part of business and can be a useful way of attracting quality staff. However, if you're going to provide fringe benefits to your staff, you need to be aware of your taxation obligations.

Fringe Benefits Tax (FBT) is a tax payable by employers for benefits paid to an employee (or an employee's associate e.g. a family member) in place of salary or wages. This is separate to income tax and is calculated on the taxable value of the fringe benefits provided.

If you provide fringe benefits to your employees, the Australian Taxation Office (ATO) recommends that you register for FBT.

Register for taxes at the same time

The Business Registration Service helps you register for FBT and other taxes on the same form.

Who can apply?

The Business Registration Service is available for:

  • New businesses starting as a sole trader, partnership, company, trust, joint venture or superannuation fund who can apply for tax registrations with an ABN, business name or company registration.
  • Existing businesses with an ABN, who can apply for tax registrations or an AUSkey login.

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Why offer your employees fringe benefits?

To secure the best workers for your business, you often have to entice them with non-income related benefits.

For example, an employee may receive fringe benefits in the form of:

  • a car
  • car parking
  • low interest loans
  • payment of private expenses.

It's entirely legal and a common form of reimbursement used by businesses for their employees.

How to provide fringe benefits

If your business provides fringe benefits to your employees then you need to:

  • calculate how much FBT you have to pay
  • register for FBT
  • keep the necessary FBT records
  • report fringe benefits on your employees' payment summaries
  • lodge a return and pay FBT to the ATO
  • understand which benefits are exempt from FBT.

What to do...

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