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  • Fringe benefit categories

    This section details each type of fringe benefit to help you complete item 23:

     

    Make sure you don't include the gross-up calculation in the amounts you show at this item.

    There are specific valuation rules for each fringe benefit category. Before you can calculate the taxable value of any benefit, and complete the details in the 'Taxable value of benefits' column, you must identify the category of the benefit you provided and do the appropriate calculations.

    See also:

     

    A – Cars using the statutory formula

    Car fringe benefits commonly arise when you make a car you 'hold' available for an employee's private use.

    You can calculate the taxable value of a car fringe benefit using either the statutory formula method or operating cost method.

    When you complete the information at item A, do not show the actual value of the cars in the 'Gross taxable value (a)' column.

    Employee contributions include:

    • amounts the employee pays directly to you for using a car
    • any car operating costs (for example, fuel) the employee paid without reimbursement by you.

    Use GST-inclusive amounts where appropriate.

    Determining the statutory percentage

    You can reduce the base value of a car by one-third for the year ending 31 March 2019 if you owned or leased the car in the year ending 31 March 2014. The reduction applies only once for a particular car and you then use the reduced base value for subsequent years.

    A flat statutory rate of 20% applies, regardless of the distance travelled, to all car fringe benefits you provide from 1 April 2014 (except where there is a pre-existing commitment in place before 7.30pm AEST on 10 May 2011 to provide a car).

    Statutory percentages for car fringe benefits provided if you have a pre-existing commitment in place before 7.30pm AEST 10 May 2011 to provide the car after this time, are available in chapter 7.4 of Fringe benefits tax – a guide for employers.

     

    Example 6: Taxable value of car fringe benefits using the statutory formula – no pre-existing commitment

    On 12 June 2018 you agreed to provide an employee with a car fringe benefit. The car was delivered on 1 July 2018 and was available to the employee for private use from that date.

    The base value of the car is $32,000.

    The employee did not make any contributions.

    The calculation of the taxable value using the statutory formula method is:

    ((A × B × C) ÷ D) − E

    Where:

    • A = the base value of the car
    • B = the applicable statutory percentage
    • C = the number of days in the FBT year when the car was used or available for private use of employees
    • D = the number of days in the FBT year
    • E = the employee contribution.

    In the example the calculation would be:

    • ($32,000 × 20% × 274) ÷ 365) − $0 = $4,804.

    At item 23, Cars using the statutory formula; write:

    • Number (of employees) – 1
    • Gross taxable value – 4,804
    • Employee contributions – 0
    • Value of reductions – (blank)
    • Taxable value of benefits is (a) − (b) − (c) = 4804

     

    Extract of Item 23 of 2019 FBT return:
• 23A Cars using the statutory formula 
• Number is 1
• Gross taxable value (a) is $4,804
• Employee contribution (b) is $0
•  Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c)  is $4,804.

    End of example

    B – Cars using the operating cost method

    Use GST-inclusive amounts where appropriate – do not show the actual value of the cars in the 'Gross taxable value (a)' column.

    Employee contributions include:

    • amounts the employee pays directly to you for using a car
    • any car operating costs (for example, fuel) the employee has paid without reimbursement by you.

    The total operating costs you use for calculating the fringe benefits taxable value of car fringe benefits are different from those you use for income tax purposes. Also, the income tax depreciation cost limit does not apply for FBT purposes.

     

    Example 7: Taxable value of car fringe benefits using the operating cost method

    You have a car with $10,000 in total operating costs for the year ending 31 March 2019. The employee who uses the car maintains a logbook. Based on the logbook and other usage patterns, you estimate the percentage of private use to be 30%. The employee has not made any contributions during the year.

    The calculation of the taxable value for the car using the operating cost method is:

    • ($10,000 × 30%) = $3,000.

    At item 23, Cars using the operating cost method; write:

    • Number – 1
    • Gross taxable value (a) – 3,000
    • Employee contribution (b) – 0
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 3,000

     

    Extract of Item 23 of 2019 FBT return:
• 23B Cars using the operating cost method 
• Number is 1
• Gross taxable value (a) is $3,000
• Employee contribution (b) is $0
• Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c) is $3,000.

    End of example

    C – Loans granted

    A loan fringe benefit arises where you provide a loan to an employee and charge a low rate of interest (or no interest). Item C is the number of loans you made that gave rise to taxable fringe benefits and the taxable value of those benefits.

    Therefore, do not show the amount of the actual loans in the 'Gross taxable value (a)' column.

    See also:

     

    Example 8: Taxable value of loan fringe benefits

    You are a retail business and lend an employee $20,000. You did not charge interest and the employee made no repayments during the FBT year.

    The calculation based on the statutory (or benchmark) interest rate that applies from 1 April 2018 is:

    • $20,000 × 5.20% = $1,040.

    At item 23, Loans granted, write:

    • Number – 1
    • Gross taxable value (a) – 1,040
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – 0
    • Taxable value of benefits is (a) − (b) − (c) = 1,040

     

    Extract of Item 23 of 2019 FBT return:
• 23C Loans granted
• Number is 1
• Gross taxable value (a) is $1,040, 
• Employee contribution (b) is blank
• Value of reductions (c) is $0
• Taxable value of benefits is (a) − (b) − (c) is $1,040.

    End of example

    D – Debt waiver

    If an employee is in debt to you and you release the employee from the obligation to repay the debt, the unpaid amount is a debt waiver fringe benefit. Show the amount of this kind of benefit at item D.

    A debt owed by an employee that you write off as a genuine bad debt is not a debt waiver fringe benefit.

     

    Example 9: Taxable value of debt waiver fringe benefit

    You waive a $500 debt (including principal and interest) that an employee owed you from a previous year.

    At item 23, Debt waiver, write:

    • Number – leave blank
    • Gross taxable value (a) – 500
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 500

     

    Extract of Item 23 of 2019 FBT return:
• 23D Debt waiver
• Number is blank
• Gross taxable value (a) is $500
• Employee contribution (b) is blank
• Value of reductions (c) is blank
Taxable value of benefits is (a) − (b) − (c)  is $500.

    End of example

    E – Expense payments

    An expense payment fringe benefit may arise in either of two ways:

    • where you (the employer) reimburse an employee for expenses they incur
    • where you pay a third party in satisfaction of expenses incurred by an employee.

     

    Example 10: Taxable value of expense payment fringe benefits

    You operate a real estate business and pay an employee's home telephone bill of $1,200 for the year ending 31 March 2019. On 31 March 2019, your employee provides a declaration stating that 60% of the bills are for business purposes and are, as a result, otherwise deductible. The other 40% of the calls are private calls.

    The calculation of the taxable value for the expense payment is:

    • $1,200 × 60% = $720. $720 is otherwise deductible
    • $1,200 − $720 = $480 taxable value.

    At item 23, Expense payments, write:

    • Number – leave blank
    • Gross taxable value (a) – 1,200
    • Employee contribution (b) – 0
    • Value of reductions (c) – 720
    • Taxable value of benefits is (a) − (b) − (c) = 480

     

    Extract of Item 23 of 2019 FBT return:
• 23E Expense payments
•  Number is blank
•  Gross taxable value (a) is $1,200
• Employee contribution (b) is $0
• Value of reductions (c) is $720
• Taxable value of benefits is (a) − (b) − (c) is $480.

    End of example

    F – Housing – units of accommodation provided

    A housing fringe benefit is when an employee is provided with the right to use a unit of accommodation. A lease, or licence, which grants that right must exist when that accommodation is the usual place of residence of the employee.

    Housing benefits provided in a remote area may be exempt benefits. Other accommodation that does not meet the requirements of a housing fringe benefit is included as a residual fringe benefit to be shown it at item M 'Other benefits (residual)'.

     

    Example 11: Taxable value of housing fringe benefits

    You manufacture chocolate and provide a flat in Sydney CBD to your employee for the year ending 31 March 2019. The flat is the employee's usual place of residence for the whole year.

    The market rental value for the year is $26,000 (52 weeks at $500). The employee pays you a nominal rent of $2,600 for the year ($50 per week).

    The calculation of the taxable value is:

    • $26,000 – $2,600 = $23,400.

    At item 23, Housing – unit of accommodation, write:

    • Number – 1
    • Gross taxable value (a) – 26,000
    • Employee contribution (b) – 2,600
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 23,400

     

    Extract of Item 23 of 2019 FBT return:
• 23F Housing – units of accommodation provided
• Number is 1
• Gross taxable value (a) is $26,000
• Employee contribution (b) is $2,600
• Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c) is $23,400

    End of example

    G – Employees receiving living-away-from-home allowance (show total paid including exempt components)

    A living-away-from-home-allowance is paid to your employee to compensate for additional expenses and any disadvantages suffered because the employee's duties require them to live away from their normal residence.

    At item G, write the amount of benefits you provide to employees as a living-away-from-home allowance, including the exempt accommodation, exempt food components and the statutory food amount.

    The statutory food amount is the amount your employees would spend on food at their normal residence – it is set at $42 per week per adult, and $21 per week per child under 12.

    Write the exempt accommodation and exempt food component amounts in the 'Value of reductions (c)' column, provided you have the relevant declarations.

    You must obtain the necessary documentary evidence or declaration of employee expenses and the declaration about living away from home so you can take advantage of any exempt accommodation and exempt food components.

    See also:

     

    Example 12: Taxable value of living-away-from-home allowance fringe benefits

    Your employee lives away from home in Australia for the year ending 31 March 2019 and receives $591 per week ($30,732 for the year) as a living-away-from-home allowance. The employee's duties of employment require them to live away from their normal residence.

    This is made up of:

    • $350 per week ($18,200 for the FBT year) for accommodation
    • $241 per week ($12,532 for the FBT year) for food.

    The accommodation component reflects what the employee could reasonably be expected to pay for rent, and the food component relates to the total estimated food expenditure of $241 per week. Your employee provides you with the required documentary evidence showing that they spent at least $350 per week on accommodation. The employee declares they have spent no more than the Commissioner's reasonable food amount and, therefore, is not required to substantiate their expenditure. The employee provides you with a living away from home declaration – employee who maintains an Australian home – on 20 April 2019.

    The employee started living at this location in January 2018. Due to the 12-month rule, you are entitled to reduce the taxable value of the allowance for the first 40 weeks of the year starting on 1 April 2018. The employee maintains a home in Australia at which they usually reside and it is available for their use during the year.

    The calculation of the taxable value for living-away-from-home allowance fringe benefits is:

    • Exempt accommodation component = $14,000 (40 weeks at $350 per week)
    • Exempt food component = $7,960 (that is, $9,640 − $1,680) [40 weeks at $199 ($241 paid less $42 per week statutory food amount)]
    • Taxable value = $30,732 − $14,000 (exempt accommodation) − $7,960 (exempt food) = $8,772
    • Value of reduction is the total of the exempt accommodation and the exempt food components = $21,960 (that is, $14,000 + $7,960).

    At item 23, Employees receiving living away from home allowance, write:

    • Number – 1
    • Gross taxable value (a) – 30,732
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – 21,960
    • Taxable value of benefits is (a) − (b) − (c) = 8,772

     

    Extract of Item 23 of 2019 FBT return:
• 23G Employees receiving living-away-from-home allowance (show total paid including exempt components)
• Number is 1
• Gross taxable value (a) is 30,732
• Employee contribution (b) is blank
• Value of reductions (c) is $21,960
• Taxable value of benefits is (a) − (b) − (c) is $8,772

    End of example

    J – Board

    Meals you provide an employee and family members living with the employee may be a board fringe benefit if:

    • you provide an employee with accommodation
    • the employee has an entitlement to at least two meals a day prepared and supplied by you on your premises.

    Example 13: Taxable value of board fringe benefits

    You provide board fringe benefits valued at $21,900 to employees for the year ending 31 March 2019. You do not require your employees to make a contribution towards their board meals and their accommodation. The employees would not have been entitled to an income tax deduction had they paid for their meals.

    At item 23, Board, write:

    • Number – leave blank
    • Gross taxable value (a) – 21,900
    • Employee contribution (b) – 0
    • Value of reductions (c) – 0
    • Taxable value of benefits is (a) − (b) − (c) = 21,900

     

    Extract of Item 23 of 2019 FBT return:
• 23J Board
• Number is blank
• Gross taxable value (a) is $21,900
• Employee contribution (b) is $0
• Value of reductions (c) is $0
• Taxable value of benefits is (a) − (b) − (c) is $21,900

    End of example

    K – Property

    You may provide a property fringe benefit when you provide an employee with property (for example, goods), either free or at a discount.

     

    Example 14: Taxable value of property fringe benefits

    You are an electrical retailer providing a television you sell to the public for $2,000, and an air conditioner you sell to the public for $1,600, to an employee during the year ending 31 March 2019. These prices are the lowest selling price including GST. Your employee paid a total of $300 for these items and did not enter into a salary packaging arrangement to pay for them.

    As these items are in-house property fringe benefits, and are not provided under a salary packaging arrangement, the taxable value is 75% of the normal selling price. Additionally, you qualify for the in-house concession of up to $1,000 per employee per year. The goods are not used for work-related purposes.

    The calculation of the taxable value of the property fringe benefit is:

    • Gross taxable value is $2,700 [($2,000 + $1,600) × 75%]

    Value of reduction is $1,000.

    At item 23, Property, write:

    • Number – leave blank
    • Gross taxable value (a) – 2,700
    • Employee contribution (b) – 300
    • Value of reductions (c) – 1,000
    • Taxable value of benefits is (a) − (b) − (c) = 1,400

     

    Extract of Item 23 of 2019 FBT return:
• 23K Property
• Number is blank
• Gross taxable value (a) is $2,700
• Employee contribution (b) is $300
• Value of reductions (c) is $1,000
• Taxable value of benefits is (a) − (b) − (c) is $1,400

    End of example

    L – Income tax exempt body – entertainment

    A tax-exempt body entertainment fringe benefit may arise from entertainment expenses incurred by you if either:

    • you are wholly or partially exempt from income tax
    • you did not get assessable income from the activities to which the entertainment relates.

    Not-for-profit employers, who are eligible for the FBT capping exemption or FBT rebate, do not need to disclose meal and entertainment facility leasing expense benefits not provided under a salary packaging arrangement at item 23 on the FBT return.

    If you provide the entertainment under a salary packaging arrangement, you can't choose to value it as a meal entertainment fringe benefit.

    If you are not exempt from income tax and you provided entertainment, this may give rise to a fringe benefit. Do not value a benefit of this type in this category – instead, establish the taxable value as an expense payment, property or residual fringe benefit, depending on how you provided the benefit. Alternatively, you can value meal entertainment as a meal entertainment fringe benefit.

     

    Example 15: Taxable value of income tax exempt body – entertainment fringe benefits

    You are a local council that provides a Christmas function for your employees on your premises. You provided finger food and your employees' spouses attended. You did not elect to value the meal as a meal entertainment fringe benefit.

    The value of the tax-exempt body – entertainment, fringe benefit is $5,000.

    At item 23, Income tax exempt body – entertainment, write:

    • Number– leave blank
    • Gross taxable value (a) – 5,000
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 5,000

     

    Extract of Item 23 of 2019 FBT return:
• 23L Income tax exempt body – entertainment
• Number is blank
• Gross taxable value (a) is $5,000
• Employee contribution (b) is blank
• Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c) is $5,000

    End of example

    M – Other benefits (residual)

    You may provide a residual fringe benefit when you provide an employee with either of the following:

    • any right, privilege, service or facility
    • any other benefit that is not one of the specific categories of fringe benefits included at other categories in item 23.

    If you choose to value entertainment facility leasing expense benefits not provided under a salary packaging arrangement under the 50-50 method, you must write the value of these benefits at item M.

     

    Example 16: Taxable value of other benefits (residual fringe benefits)

    You run a construction business and own a one-tonne utility with $8,000 in total operating costs for the year ending 31 March 2019. Your employee uses the utility for both business and private purposes. On 1 May 2019 your employee provides you with a declaration stating that they used the utility 25% of the time for private purposes. Your employee has not made any contributions during the year towards the use of the utility.

    The calculation of the taxable value for the utility is:

    • ($8,000 × 25%) − $0 = $2,000.

    Value of reduction is $8,000 × 75% = $6,000 (business usage).

    At item 23, Other benefits (residual), write:

    • Number– leave blank
    • Gross taxable value (a) – 8,000
    • Employee contribution (b) – 0
    • Value of reductions (c) – 6,000
    • Taxable value of benefits is (a) − (b) − (c) = 2,000

     

    Extract of Item 23 of 2019 FBT return:
• 23M Other benefits (residual)
• Number is blank
• Gross taxable value (a) is $8,000
• Employee contribution (b) is $0
• Value of reductions (c) is $6,000
• Taxable value of benefits is (a) − (b) − (c) is $2,000

    End of example

    N – Car parking

    A car parking fringe benefit may arise for each day on which you provide a car parking space for use by an employee.

    See also:

     

    Example 17: Taxable value of car parking fringe benefits

    You have 10 parking spaces under your city building that you let your employees use during the year ending 31 March 2019.

    Your employees use the parking spaces for more than four hours during the working day and there are several commercial parking stations within a kilometre charging more than $10 a day on 1 April 2018.

    The car parking fringe benefits are valued at $20,000. Your employees have not made any contributions during the year.

    At item 23, Car parking, write:

    • Number– leave blank
    • Gross taxable value (a) – 20,000
    • Employee contribution (b) – 0
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 20,000

     

    Extract of Item 23 of 2019 FBT return:
• 23N Car parking
• Number is blank
• Gross taxable value (a) is $20,000
• Employee contribution (b) is $0
• Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c) is $20,000

    End of example

    P – Meal entertainment

    If expense payment fringe benefits, property fringe benefits, residual fringe benefits or tax-exempt body entertainment fringe benefits arise from the provision of meal entertainment, you may be eligible to classify these fringe benefits as meal entertainment fringe benefits. You are not eligible to make an election if benefits are provided under salary packaging arrangements on, or after, 1 April 2018.

    If you choose to classify a fringe benefit as a meal entertainment fringe benefit, you have to classify all fringe benefits arising from the provision of meal entertainment during the year ending 31 March 2019 as meal entertainment fringe benefits.

    Specifically, the provision of meal entertainment means:

    • providing entertainment by way of food or drink
    • providing accommodation or travel in connection with, or to facilitate the provision of, such entertainment
    • paying or reimbursing expenses incurred by the employee for the above.

     

    See also:

    There are two methods you can use to calculate the taxable value of meal entertainment fringe benefits:

    • 50-50 split method
    • 12-week register method.

    You must decide to classify fringe benefits as meal entertainment by 21 May 2019 unless we have allowed you to lodge later, or you have a later due date.

    Not-for-profit employers, who are eligible for the FBT capping exemption or FBT rebate, do not need to disclose meal and entertainment facility leasing expense benefits not provided under a salary packaging arrangement at item 23 on the FBT return.

    Example 18: Taxable value of meal entertainment fringe benefits

    You spend $4,000 on meal entertainment not provided under a salary packaged arrangement for the year ending 31 March 2019. You elect on 1 April 2019 to value the meal entertainment fringe benefits using the 50–50 split method.

    The calculation of the taxable value for the meal entertainment fringe benefits is:

    • $4,000 × 50% = $2,000.

    At item 23, Meal entertainment, write:

    • Number– leave blank
    • Gross taxable value (a) – 2,000
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – leave blank
    • Taxable value of benefits is (a) − (b) − (c) = 2,000

     

    Extract of Item 23 of 2019 FBT return:

• 23P Meal entertainment 
• Number is blank
• Gross taxable value (a) is $2,000
• Employee contribution (b) is blank
• Value of reductions (c) is blank
• Taxable value of benefits is (a) − (b) − (c) is $2,000

    End of example

    Next steps:

     

    Last modified: 26 Mar 2019QC 58352