The grossed-up taxable value of a benefit you receive is the gross salary that you would have to earn in order to purchase the benefit from your after tax income.
This amount is reported to ensure the value of the benefits is consistent with other forms of income on your payment summary.
Your employer calculates this amount using the FBT rate equal to the highest marginal rate of income tax, plus Medicare levy. For the FBT year ended 31 March 2009, this is 46.5%. For example, a fringe benefit with a taxable value of $2,000.01 is a reportable fringe benefit amount of $3,738.
If a reportable fringe benefit amount shown on your payment summary is less than $3,738, check with your employer about how the amount was calculated.
Even though this amount is included on your payment summary, you do not:
include it in your total income or loss amount
pay income tax or Medicare levy on it.
However, it is included in a number of income tests for some government benefits and obligations.
Example: working out amounts for payment summaries
Between 1 April 2008 and 31 March 2009 (the 2008-09 FBT year), Tim’s employer provided him with a work car. The taxable value of Tim’s car fringe benefits is $2,500. Tim and his partner also stay in company coastal accommodation several times a year, with a taxable value of $800.
The taxable value of Tim’s fringe benefits total $3,300. The grossed-up taxable value of these benefits will appear on his payment summary for the income year ending 30 June 2009.
The rate of FBT for the year ended 31 March 2009 is 46.5%, so the grossed-up amount to be reported on Tim’s payment summary would be $6,168. This is calculated as follows:
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