Fringe benefits tax (FBT) is a tax paid to the ATO by businesses that provide certain types of benefits to their employees in place of (or to ‘top-up’) salary or wages. Does your business need to Register for Fringe Benefits Tax? To find out, let’s cover a couple of important items…
Do your employees use a business-owned car for their private use? If yes, this is a fringe benefit according to the ATO. You might have to pay Fringe Benefits Tax on the taxable value of the car.
Just one example of when the answer is “yes” is when a business provides a car to an employee for personal use rather than purely business use.
You might also have to pay FBT on employee benefits such as loans, accommodation or entertainment expenses. If you offer this sort of benefits to your employees, you must register for FBT.
Fortunately, you might be able to claim a tax deduction for the cost of providing fringe benefits to your employees and also for the Fringe Benefits Tax you pay to the ATO.
The FBT rate for the year ending 31 March 2014 is 46.5%.
The FBT rate for the year ending 31 March 2015 is 47%.
We’ve met several business owners who have been stung by ATO back-payments after ignoring FBT issues. Don’t let this be you! Talk to us about any concerns — we can clarify whether you need to register and pay FBT.
References:
http://www.ato.gov.au/General/Fringe-benefits-tax/In-detail/
