You’re probably aware that Fringe Benefits Tax (FBT) is a tax that employers pay on certain benefits provided to their employees. However, there are certain benefits that are exempt from FBT, known as FBT exempt benefits. These benefits can provide a cost-effective way for employers to reward and motivate their employees.
Some of the common FBT exempt benefits include:
Portable electronic devices: Employers can provide their employees with portable electronic devices such as smartphones, laptops, tablets, and portable GPS navigation devices as FBT exempt benefits. However, there are certain conditions that must be met, such as the device being primarily used for work-related purposes.
Car parking: Employers can provide their employees with car parking facilities on or near their premises as an FBT exempt benefit. However, there are very particular conditions that must be met, such as the car parking being provided to all employees on an equal basis.
Certain vehicles: Some utes, panel vans, taxis, and other commercial vehicles may be an FBT exempt benefit if specific conditions are met and there is no private use other than work-related travel and incidental private use that is irregular, infrequent and minor. This is complex so seek professional advice if you’re unsure
Minor and infrequent benefits: Employers can provide their employees with minor and infrequent benefits for things like birthday or Christmas gifts, as long as the value of the benefit is less than $300.
Certain entertainment benefits: Some food and drink you provide to employees may be an FBT exempt benefit IF it is for current employees, consumed on the business premise, AND occurs during a workday – eg catering costs for an in-house meeting.
Using XERO and want to make light work of your FBT coding? Click here to download our Entertainment Coding Guide.
Work-related training & membership fees: Employers can provide their employees with work-related training including training courses, seminars, and conferences that are directly related to the employee’s job. Similarly, membership fees and subscriptions conferring a subscription to a trade or professional journal, or an entitlement to use a corporate credit card or an airport lounge may be exempt benefits.
Remote area housing: Employers can provide their employees with housing in remote areas as an FBT exempt benefit. However, there are certain conditions that must be met, such as the housing being located in a remote area and being provided to the employee for the purpose of performing their duties.
FBT is a complex tax area, and subject to increasing scrutiny from the ATO, so if you’re not certain as to whether an expense is exempt from FBT or not, or if you’re unsure about any of the conditions required for certain benefits, please seek professional advice.
Could it be an exempt benefit? Download the full list of common FBT Exempt Benefits
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