Recent and Proposed Changes to FBT Laws
Employment benefits are often used to acknowledge and compensate employees for their important contribution to the business. Certain benefits such as the private use of a car or vehicle, the payment of private expenses and some types of entertainment are subjected to Fringe Benefit Tax also known as FBT. The employer is liable to pay the FBT at the current rate.
New FBT rules
Tax rates: For the FBT year ending on March 31, 2016 and on March 31, 2017, the FBT rate is at 49% and 47% for the year ending on March 31, 2018.
Not-for-profit capping threshold: The FBT threshold for not-for-profit organizations such as Public Benevolent Institutions, Health Promotion Charities and rebatable employers is $31,177 for the FBT period ending on March 31, 2016 and March 31, 2017. For public and non-profit hospitals and public ambulance services, the threshold is $17,667 for the FBT year ending on March 31, 2016 and March 31, 2017. For the following period ending on March 31, 2018, the FBT threshold for these not-for-profit entities will be $30,000 and $17,000, respectively.
Basic car rate: For the year ending on March 31, 2017, an employer is allowed to reimburse an employee for certain car expenses using a single car rate of cents per kilometer as determined by the Commissioner of Taxation.
Salary packaged meal entertainment and entertainment facility leasing benefits: As a rule, all salary packaged meal entertainment and entertainment facility leasing benefits must be reported in the employee’s payment summary if the value of such benefits exceeds the reporting exclusion threshold.
FBT exemption for electronic devices: Employers operating small businesses that provide employees with more than one portable electronic device for the year ending March 31, 2017 are allowed an FBT exemption. The exemption applies even where the devices have identical functions.
Working out your fringe benefits tax return can be confusing, given the complicated rules surrounding its computation. If you own or manage a business that provides employment benefits that are subject to FBT, it is your duty to report and pay the correct fringe benefits tax on these perks. Talk to an experienced tax consultant or accounting professional about these matters.
In Australia, the experienced accountants at ATP Tax Consultants have been helping business owners, professionals, and self-employed manage their finances by providing important tax advice on complex matters such as the fringe benefits tax. Our financial advisers are constantly updated on the latest developments, tax rates and regulations to ensure full business compliance. Contact us online or call us today at 1300-829-484.