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). The benefit may be in addition to, or part of, their salary or wages package. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.
If you are a director of a company or a beneficiary of a trust working in the business, benefits you receive in connection with your employment may be subject to FBT.
For example, an employee may receive fringe benefits in the form of:
- a car
- low interest loans
- payment of private expenses
- entertainment
If your business provides fringe benefits to your employees then you need to register for FBT and lodge an FBT tax return every year. The FBT year runs from 1 April to 31 March (it is not aligned with the financial year).
If you have provided Fringe Benefits please contact us so we can discuss your registration needs and how to prepare and comply with the requirements.
