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A rebatable employer provides the following benefits to a single employee during the FBT year. The employer was a rebatable employer from 31 October in an FBT year.
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Car fringe benefit
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$7,700
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GST taxable supply with an entitlement to GST credits.
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Restaurant meals
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$1,100
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Valued as expense payment. Excluded fringe benefit with an entitlement to GST credits.
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Reimbursement of school fees
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$6,000
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Expense payment fringe benefit. GST-free supply with no entitlement to GST credits.
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Remote area rent reimbursement
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$3,000
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Excluded fringe benefit for payment summary reporting purposes only. No entitlement to GST credits.
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To calculate their FBT payable, the rebatable organisation needs to first calculate their gross tax (see table 1).
Table 1 - Calculating the gross tax
Step
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Action
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Result
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1
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Establish the employee's individual fringe benefits amount. The individual fringe benefits amount is the value of all benefits other than excluded benefits.
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The individual fringe benefits amount =
Car fringe benefit + reimbursement of school fees
$7,700 +
$6,000
= $13,700
The individual fringe benefits amount is $13,700.
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2
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Identify the amount of GST-creditable fringe benefits included in the amount for step 1.
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$7,700
(Amount 1)
In this example, the employer is entitled to GST credits for the car fringe benefit.
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3
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Identify those fringe benefits not taken into account in the calculation for amount 1
(that is, the result from step 1 minus the result from step 2).
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$13,700 -
$7,700
= $6,000
(Amount 3)
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4
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Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits.
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$1,100 +
$3,000
= $4,100
The excluded fringe benefits are the restaurant meals and the remote area rent reimbursement.
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5
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Identify the GST-creditable fringe benefits included in step 4.
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$1,100
(Amount 2)
In this example, the employer is entitled to GST credits on the restaurant meals.
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6
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Identify those excluded fringe benefits that are not taken into account under amount 2
(that is, the result from step 4 minus the result from step 5).
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$4,100 -
$1,100
= $3,000
(Amount 4)
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7
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Add amount 1 and amount 2
(that is, the result from step 2 plus the result from step 5).
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$7,700 +
$1,100 =
$8,800
The type 1 individual fringe benefits taxable amount is $8,800.
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8
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Use the following formula:
Type 1 individual fringe benefits amount
X
FBT rate + GST rate
(1 - FBT rate) x (1 + GST rate) x FBT rate
(that is, the result from step 7 x 2.0647).
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$8,800 x
2.0647 =
$18,169
(rounded to the nearest dollar)
The individual grossed-up type 1 fringe benefits taxable amount is $18,169.
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9
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Add amount 3 and amount 4
(that is, the result from step 3 plus the result from step 6).
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$6,000 +
$3,000
= $9,000
The type 2 individual fringe benefits taxable amount is $9,000.
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10
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Use the following formula:
Type 2 individual fringe benefits amount
X
1
1 - FBT rate
(that is, the result from step 9 x 1.8692).
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$9,000 x
1.8692
= $16,822
(rounded to the nearest dollar)
The individual grossed-up type 2 fringe benefits amount is $16,822.
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11
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For each employee add:
- the individual grossed-up type 1 fringe benefits amount
- the individual grossed-up type 2 fringe benefits amount.
(that is, the result from step 8 plus the result from step 10).
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$18,169 +
$16,822
= $34,991
The individual fringe benefits taxable amount is $34,991.
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12
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Add together the individual fringe benefits taxable amount calculated for every employee
(that is, the result from step 11 for every employee).
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There is only one employee, so the total fringe benefits taxable amount is $34,991.
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13
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Multiply the total fringe benefits taxable amount by the FBT rate
(that is, the result from step 12 x 46.5%).
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$34,991 x
0.465
= 16,270.81
The gross tax is $16,270.81.
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The rebatable organisation then needs to then calculate their FBT rebate (see table 2).
Table 2 - Calculating your FBT rebate
Step
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Action
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Result
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1
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Establish the employee's individual fringe benefits amount
The individual fringe benefits amount is the value of all benefits other than excluded benefits.
(This will be the same amount calculated in table 1, step 1).
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$13,700
(From table 1,
step 1)
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2
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Identify the amount of GST-creditable fringe benefits included in the amount for step 1.
(This will be the same amount calculated in table 1, step 2).
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$7,700
(Amount 1)
(From table 1,
step 2)
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3
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Identify those fringe benefits not taken into account in the calculation for step 2
(that is, the result from step 1 minus the result from step 2).
(This will be the same amount calculated in table 1, step 3).
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$6,000
(Amount 3)
(From table 1,
step 3)
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4
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Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits.
Benefits specifically not included in this calculation are:
- benefits that constitute the provision of meal entertainment
- benefits that would be a car parking fringe benefit
- benefits attributable to entertainment facility leasing expenses.
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$3,000
(The $3,000 is the remote area rent reimbursement. The restaurant meals of $1,100 are specifically not included here).
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5
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Identify the GST-creditable fringe benefits included in step 4.
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$0
(Amount 2)
(The employer is not entitled to GST credits for the remote area rent reimbursement).
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6
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Identify those excluded fringe benefits that are not taken into account under step 5
(that is, the result from step 4 minus the result from step 5).
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$3,000 - $0
= $3,000
(Amount 4)
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7
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Add amount 1 and amount 2
(that is, the result from step 2 plus the result from step 5).
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$7,700 + $0
= $7,700
The type 1 individual base non-rebatable amount is $7,700.
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8
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Use the following formula:
Type 1 individual base non-rebatable amount
X
FBT rate + GST rate
(1 - FBT rate) x (1 + GST rate) x FBT rate
(that is, the result from step 7 x 2.0647).
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$7,700 x 2.0647
= $15,898
(rounded to nearest dollar)
The individual grossed-up type 1 non-rebatable amount is $15,898.
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9
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Add amount 3 and amount 4
(that is, the result from step 3 plus the result from step 6).
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$6,000 + $3,000
= $9,000
The type 2 individual base non-rebatable amount is $9,000.
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10
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Use the following formula:
Type 2 individual base non-rebatable amount
X
1
1 - FBT rate
(that is, the result from step 9 x 1.8692).
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$9,000 x 1.8692
= $16,822
(rounded to the nearest dollar)
The individual grossed-up type 2 non-rebatable amount is $16,822.
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11
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For each employee add:
- the individual grossed-up type 1 non-rebatable amount for the FBT year
(that is, the result from step 8)
- the individual grossed-up type 2 non-rebatable amount for the FBT year
(that is, the result from step 10).
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$15,898 + $16,822
= $32,720
The individual grossed-up non-rebatable amount is $32,720.
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12
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Subtract $30,000 from the individual grossed-up non-rebatable amount for each employee.
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$32,720 -$30,000
= $2,720
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13
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Add together the amounts calculated at step 12 for each employee.
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As there is only one employee, this amount is $2,720.
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14
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Multiply the total amount calculated under step 13 by the FBT rate.
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$2,720 x 0.465
= $1,264.80
The aggregate non-rebatable amount is $1,264.80.
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15
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Use this formula:
0.48
X
(gross tax - aggregate non-rebatable
amount)
X
number of days in FBT year
you were a rebatable employer
total days in FBT year
That is:
0.48
X
(table 1, step 13 - table 2, step 14)
X
rebatable days in year
total days in year
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0.48
X
($16,270.81 - $1,264.80)
X
183
183
=0.48 X $15,006.01 X 1
= $7,202.88
The FBT rebate is $7,202.88.
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The rebatable organisation then needs to calculate their FBT payable (see table 3).
Table 3 - Calculating your FBT payable
Step
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Action
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Result
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1
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Gross tax - FBT rebate
(that is, the result from table 1, step 13 minus the result from table 2, step 15).
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$16,270.81 - $7,202.88
= $9,067.93
The FBT payable is $9,067.93.
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Sections within 6.6 Calculating the FBT rebate
Last Modified: Friday, 24 December 2010
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