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  • Fringe benefits tax

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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 also 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. The rate of FBT for the 2011-12 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. Employees generally do not pay income tax on the fringe benefits they receive.

    The FBT year runs from 1 April to 31 March, rather than from 1 July to 30 June as is the case for other tax types. The 2011-12 FBT year ran from 1 April 2011 to 31 March 2012. FBT returns must be lodged by 21 May each year. 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 individual tax.

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    Overview

    For the 2011-12 fringe benefits tax (FBT) year:

    • FBT payable was $439.1 million for Australian Government departments, a 0.9% decrease from 2010-11
    • FBT payable was $3.3 billion for other employers, an increase of 1.7% from 2010-11
    • FBT rebates of $108.7 million were claimed, a 6.1% increase from 2010-11

    employee contributions towards the cost of providing fringe benefits totalled $1.4 billion, an increase of 15.5% from 2010-11.

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      Last modified: 03 Mar 2014QC 33846