Work out the FBT to pay, including applying the type 1 or type 2 gross-up rate and the FBT rate.

## What you need to do

As an employer, you must self-assess the amount of fringe benefits tax (FBT) you have to pay.

To work out how much FBT you have to pay, you 'gross-up' the taxable value of the benefits you've provided. This reflects the gross salary your employees would have to earn, at the highest marginal tax rate (including Medicare levy), to buy the benefits themselves.

The FBT you owe is the grossed-up amount multiplied by the FBT rate.

You pay this amount to us by the date your FBT return is due, which is generally 21 May.

## How to calculate FBT – business and government

Use the steps below if you are a:

### Step 1: Work out the taxable value of each fringe benefit

• How you work out the taxable value of a fringe benefit varies according to the type of benefit.
• If the cost of the fringe benefit included GST, include this in the taxable value.
• If you provided car fringe benefits, you can use the FBT car calculator to work out the taxable value of those benefits.

### Step 2: Add up fringe benefits from step 1 that included GST

• These are fringe benefits for which you can claim a GST credit.
• Include both reportable and any non-reportable benefits.

### Step 3: Multiply the step 2 amount by the higher gross-up rate

• The higher (type 1) gross-up rate is 2.0802.
• You can claim GST credits for these fringe benefits. The higher rate takes this into account.
• This rate applies for all FBT years since the FBT year ending 31 March 2019. For gross-up rates in earlier years, see Fringe benefits tax – historical rates and thresholds.

### Step 4: Add up the fringe benefits from step 1 that did not include GST

• These are benefits that were either GST-free or input taxed.
• Include both reportable and any non-reportable benefits.

### Step 6: Add up the amounts from steps 3 and 5

• This is your total fringe benefits taxable amount.

### Step 7: Multiply the step 6 amount by the FBT rate

Example: calculating how much FBT you have to pay

MantCo has 2 employees, Marta and Anthony. Using steps 1–7 above, MantCo calculates its FBT liability as follows.

1. MantCo works out the taxable value of the fringe benefits it provided to its employees:
• A car fringe benefit for Marta with a taxable value of \$7,700, including GST.
• A car fringe benefit for Anthony with a taxable value of \$6,600, including GST.
• School fees for Anthony's daughter with a taxable value of \$6,000. The school fees are GST-free.
• Restaurant meals for both Marta and Anthony, with a taxable value of \$2,200, including GST. Meals are not reportable benefits, so MantCo does not need to allocate the taxable value of the meals to the individual employees.

2. The total taxable value of the fringe benefits that included GST is:
\$7,700 (car) + \$6,600 (car) + \$2,200 (meals) = \$16,500.
3. MantCo uses the type 1 rate to gross up the fringe benefits that included GST:
\$16,500 × 2.0802 = \$34,323 (rounded to the nearest dollar).
4. The total taxable value of the fringe benefits that did not include GST is:
\$6,000 (school fees).
5. MantCo uses the type 2 rate to gross up the fringe benefits that did not include GST:
\$6,000 × 1.8868 = \$11,321 (rounded to the nearest dollar).
6. The total fringe benefits taxable amount is:
\$34,323 + \$11,321 = \$45,644
7. MantCo uses the FBT rate to calculate the total FBT it must pay:
\$45,644 × 47% = \$21,452.68.
End of example

## How to calculate FBT – for FBT-exempt and rebatable not-for-profit organisations

There are additional steps in the FBT calculation if you are a not-for-profit organisation that is exempt from FBT or eligible for the FBT rebate.

This is because the benefits you provide to your employees are exempt or rebatable, up to a capping threshold for each employee.

Use the calculator to work out the FBT payable for the fringe benefits you provide to each of your employees.

### FBT-exempt employers – calculate FBT manually

For FBT-exempt employers, fringe benefits you provide to an employee are exempt from FBT, up to a capping threshold. Any fringe benefits in excess of the capping threshold do not qualify for this exemption.

To manually calculate your FBT exempt and non-exempt amounts, see FBT guide: 6.10 Calculating the FBT exemption.

### Rebatable employers – calculate FBT manually

For rebatable employers, you apply a rebate to the grossed-up value of fringe benefits you provide to an employee, up to a capping threshold. Any fringe benefits in excess of the capping threshold do not qualify for the rebate.

To manually calculate your FBT amounts and rebate, see FBT guide: 6.11 Calculating the FBT rebate.