A Quick Guide to Fringe Benefits Tax

If you’re an employer in Australia, you may have heard of Fringe Benefits Tax. FBT is a tax on non-cash benefits that you provide to your employees or their associates. In this quick guide, we’ll go over the basics of FBT and what you need to know to comply with the law.

What are fringe benefits?

If you’re an employer in Australia, you may have heard of Fringe Benefits Tax. FBT is a tax on non-cash benefits that you provide to your employees or their associates. In this quick guide, we’ll go over the basics of FBT and what you need to know to comply with the law
    • Private use of a company car
    • Health insurance or gym memberships
    • Entertainment expenses, such as tickets to sporting events or concerts
    • Housing or rent assistance
    • Education or training expenses
    • Loans at reduced interest rates
    • Right to Property – shares, bonds
    • Childcare costs and school fees
Fringe benefits can be a valuable way to attract and retain employees, but they are also subject to Fringe Benefits Tax.

What is Fringe Benefits Tax (FBT)?

FBT is a tax on the value of fringe benefits that you provide to your employees or their associates. It is separate from income tax and is paid by the employer, not the employee.

The FBT rate is currently set at 47%, which means that for every $1 of fringe benefit provided, the employer must pay an additional 47 cents in FBT. However, some exemptions and concessions may apply.

Why do employers need to pay FBT?

The idea behind FBT is that fringe benefits are considered a form of income, just like a salary or wages, and should therefore be subject to taxation. The employer is responsible for paying the tax on behalf of the employee as they are the ones providing the benefit to the employee.

Exemptions and concessions on FBT

There are a number of exemptions and concessions available for certain types of fringe benefits. For example, some work-related items (such as tools or laptops) may be exempt from FBT if they are used primarily for work purposes. You can find out more about the exemptions and concessions from ATO website.

The year 2023 FBT due date

The 2023 FBT year ended on 31 March 2023. You’ll need to lodge your FBT return and pay any outstanding liability by 22 May 2023 to avoid interest and penalties. If you’re submitting your tax return electronically through a tax practitioner, the deadline for lodging and paying is on 26 June 2023.

 If you need help navigating the world of Fringe Benefits Tax, our team at MKG Partners is here to help. We specialise in tax planning and compliance for businesses of all sizes, and we have the knowledge and expertise to ensure that you’re meeting all of your FBT obligations. Contact us today to learn more about our services and how we can help you stay on top of your taxes.

About MKG Partners

MKG Partners is a well- established practice located in the Southern suburbs of Perth. Our mission is to be a trusted advisor on matters concerning Personal and business taxation, Business Advice, Planning and Assistance, Superannuation, Corporate Compliance and Financial Planning

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MKG Partners Locations

PERTH OFFICE
24 Augusta Street Willetton WA 6155
Phone: +61 8 9354 6500
Email: admin@mkgpartners.com.au

MALAYSIA OFFICE
Sunway Metro, 24-1, Jalan PJS
11/28, Bandar Sunway, 46150 Petaling Jaya, Selangor
Email: admin@mkgpartners.com.au

About MKG Partners

MKG Partners is a well- established practice located in the Southern suburbs of Perth. Our mission is to be a trusted advisor on matters concerning Personal and business taxation, Business Advice, Planning and Assistance, Superannuation, Corporate Compliance and Financial Planning

MKG Partners Locations

PERTH OFFICE
24 Augusta Street Willetton WA 6155
Phone: +61 8 9354 6500
Email: admin@mkgpartners.com.au

MALAYSIA OFFICE
Sunway Metro, 24-1, Jalan PJS
11/28, Bandar Sunway, 46150 Petaling Jaya, Selangor
Email: admin@mkgpartners.com.au

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