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  • Fringe benefits tax gap

    This information is about the estimated fringe benefits tax (FBT) gap. This gap forms a part of our overall tax performance program.

    FBT is a deductable business expense for employers. In estimating this tax gap, we needed to account for this deduction and calculate the revenue effect of this on the net gap estimate.

    For 2018–19, the net FBT gap estimate was around $1.13 billion or 22.6%. In other words, we estimate overall that those with an FBT liability paid around 77% of the total theoretical tax payable by them in 2018–19. This is similar to the results for the previous two years.

    Note: a purpose of the FBT system is to inhibit non-taxed employee remuneration and FBT might be considered a component of the broader Pay As You Go Withholding (PAYGW) / income tax on salary and wages regime. On this basis, noting that in 2018-19 the net PAYGW gap was 1.6% the overall gap for the taxation of employee remuneration is significantly lower in percentage terms than the FBT gap on its own. With FBT and PAYGW viewed together, the integrated gap is approximately 2.1% in 2018-19. That is, employers are voluntarily paying nearly 98% of the taxes related to their employees' remuneration.

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      Last modified: 19 Oct 2021QC 64017