The Australian financial year has ended, and for businesses that provide fringe benefits to employees, it’s time to turn your attention to Fringe Benefits Tax (FBT). This blog post from Cyberlux will guide you through everything you need to know about FBT, from what it is to how to lodge your return.
What is FBT?
Fringe benefits are perks or advantages provided by an employer to an employee in addition to their regular salary or wages. These benefits can be many things, such as a company car, private health insurance, salary sacrifice arrangements for meals or entertainment, or even free gym memberships.
While these benefits boost employee morale and can be a great recruitment tool, they are also subject to Fringe Benefits Tax. FBT is a tax that employers must pay on the taxable value of fringe benefits they provide to their employees.
Key Dates and Resources
- The FBT year runs from 1 April to 31 March. As of April 9, 2024, the 2024 FBT year has just ended.
- The due date to lodge your FBT return and pay any outstanding FBT liability is 21 May 2024.
Here are some helpful resources from the Australian Taxation Office (ATO) to learn more about FBT:
- Fringe Benefits Tax Time is Here: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax
- How Fringe Benefits Tax Works: https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax
- Exemptions, Concessions and Other Ways to Reduce FBT:
https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax
Who Needs to Lodge an FBT Return?
Any employer who provided fringe benefits to their employees during the FBT year must lodge an FBT return, even if the total taxable value of the benefits is low.
However, there are a few exceptions. For instance, you don’t need to lodge an FBT return if:
- The total taxable value of all fringe benefits provided to all your employees is less than $2,000.
- You’re a registered charity or other exempt organization.
What are Exempt Benefits?
Not all fringe benefits are taxable. Some common exempt benefits include:
- Reasonable work-related items such as laptops, phones, and tools of the trade provided for work use.
- Salary packaging for essential living costs (meals while traveling for work, for example).
- Minor benefits such as occasional meals or flu vaccinations provided by the employer.
Calculating and Reporting FBT
To lodge your FBT return, you’ll need to calculate the taxable value of each fringe benefit you provided. The ATO website provides various methods and tools to help with this calculation. Record-keeping is crucial during this process, so ensure you have documented all fringe benefits provided throughout the year.
Once you’ve calculated the taxable value of all fringe benefits, you can lodge your FBT return electronically through the ATO portal or by paper form.
Fringe Benefits Tax Concessions
The ATO offers various concessions that can help reduce your FBT liability. These concessions may apply to specific benefits, like salary sacrificed meals or remote area housing provided to employees.
Cyberlux Can Help!
Managing FBT can be complex, especially for businesses with a diverse range of employee benefits. Cyberlux offers a suite of accounting and tax services to help businesses with FBT compliance. Our team of experienced professionals can help you:
- Identify and categorise fringe benefits provided to employees.
- Calculate the taxable value of fringe benefits.
- Lodge your FBT return accurately and on time.
- Advise you on strategies to minimise your FBT liability.
Don’t let FBT become a headache! Contact Cyberlux today for a consultation and let us help you navigate the complexities of Fringe Benefits Tax.
