Fringe benefits tax is a tax paid on certain benefits you provide to your employees or your employees' associates. FBT is separate from income tax and is based on the taxable value of the various fringe benefits you provide.
The FBT year runs from 1 April to 31 March.
What is a fringe benefit
A fringe benefit is a benefit provided in respect of employment. This effectively means a benefit provided to an employee (or their associate) because they are an employee.
You can provide these benefits, or they can be provided by:
- an associate of yours
- a third party under an arrangement with you.
An employee can be a current, future or former employee.
Some employers, including charities, may need to work out the status of their workers. Many will be volunteers, however, some will be contractors and employees. Generally, benefits provided to volunteers and contractors don't attract FBT.
Benefits include:
- rights
- privileges
- services.
For example, you provide a fringe benefit when you:
- allow your employee to use a work car for private purposes
- give your employee a cheap loan
- reimburse an expense incurred by your employee, such as school fees
- provide entertainment by way of food, drink or recreation.
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When working out if a benefit is provided in respect of employment, ask yourself if you would have provided the benefit if the recipient had not been your employee.
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Last Modified: Thursday, 8 October 2009