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  • Fringe benefits tax

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    Fringe benefits tax chapter

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    A fringe benefit is, generally speaking, a benefit provided in respect of employment. Fringe benefits are provided to employees (or associates of the employees) in place of, or in addition to, salary or wages. Benefits include any right, privilege, service or facility - for example, the use of a car for private purposes.

    Fringe benefits tax (FBT) is the tax paid by employers on fringe benefits. The benefit does not have to be provided directly by the employer for FBT to apply. FBT may still apply if the benefit is provided by an associate of the employer or by a third party under an arrangement with the employer or an associate of the employer.

    Employees generally do not pay income tax on the fringe benefits they receive. FBT is paid by employers, irrespective of whether they are sole traders, partnerships, trusts, corporations, unincorporated associations or government bodies, and irrespective of whether they are liable to pay other taxes such as income tax. The rate of FBT for the 2009-10 FBT year remained unchanged from the previous year at 46.5%.

    Employers can generally claim an income tax deduction for the cost of providing fringe benefits. FBT paid by an employer may also be an allowable income tax deduction.

    The FBT year runs from 1 April to 31 March each year, rather than from 1 July to 30 June as is the case for other tax types. For example, the 2009-10 FBT year ran from 1 April 2009 to 31 March 2010. FBT returns must be lodged by 21 May each year, which is a shorter lodgment period than for other tax types. These features of the FBT system enable the reporting of FBT statistics that are one year ahead of the statistics based on other income year return forms - for example, for personal tax.

    This chapter primarily reports and discusses FBT statistics for the 2009-10 FBT year.

    Overview

    For the 2009-10 fringe benefits tax (FBT) year:

    • FBT payable was $390.8 million for Australian Government departments, a 2.6% increase from 2008-09
    • FBT payable was $3.0 billion for other employers, a decrease of 10.2% from 2008-09
    • FBT rebates of $94.5 million for other employers were claimed, a 2.9% decrease from 2008-09
    • employee contributions to Australian Government departments were $257 million, an increase of 17.7% from 2008-09, while employee contributions to other employers were $865 million, an increase of 15.1% from 2008-09.

    Note: FBT payable refers to the 'Amount of tax payable' reported on the fringe benefit return (item 15).

      Last modified: 18 Oct 2011QC 23907