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  • Item 23 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.

    You must use the statutory formula method unless you elect to use the operating cost method. However, if you've not kept the required documentation for the operating cost method (such as log books), you can't reduce the taxable value for any business use of the car. You can choose whichever method results in the lowest taxable value, regardless of which method you used in a previous year.

    Determining the statutory percentage

    You can reduce the base value of a car by one-third for the year ending 31 March 2020 if you owned or leased the car in the year ending 31 March 2015. 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.

    How to complete item 23A

    Number
    • Write the number of cars you used to provide the car fringe benefits using the statutory formula method.
    • Don't write the total number of car fringe benefits provided.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the car fringe benefits calculated using the statutory formula method, before any reductions (for example, employee contributions).
    • Show the amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • If there are no employee contributions, copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c)).
    Employee contribution (b)
    • Write the sum of all employee contributions made toward car fringe benefits provided where the statutory formula method has been used.
    • 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
       
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Leave this field blank.
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of car fringe benefits provided valued using the statutory formula method – that is (a) − (b).
    • If the total of the employee contributions received are greater than the gross taxable value of benefits provided, show zero here. Don't show a negative number.

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

    On 12 June 2019 you agreed to provide an employee with a car fringe benefit. The car was delivered on 1 July 2019 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% × 275) ÷ 366) − $0 = $4,808.

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

    • Number (of employees) – 1
    • Gross taxable value – 4,808
    • Employee contributions – 0
    • Value of reductions – (blank)
    • Taxable value of benefits is (a) − (b) − (c) = 4,808.

     Extract of Item 23 of 2020 FBT return: 23A Cars using the statutory formula, Number is 1 Gross taxable value (a) is $4,808; Employee contribution (b) is $0; Value of reductions (c) is blank; Taxable value of benefits is (a) - (b) - (c) is $4,808.

    End of example

    B – Cars using the operating cost method

    You must use the statutory formula method unless you elect to use the operating cost method. However, if you've not kept the required documentation for the operating cost method (such as log books), you can't reduce the taxable value for any business use of the car. You can choose whichever method results in the lowest taxable value, regardless of which method you used in a previous year.

    How to complete item 23B

    Number
    • Write the number of cars you used to provide the car fringe benefits using the operating cost method.
    • Don't write the total number of car fringe benefits provided.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the car fringe benefits calculated using the operating cost method, before any reductions (for example, employee contributions).
    • Show the amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • If there are no employee contributions, copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c )).
    Employee contributions (b)
    • Write the sum of all employee contributions made toward car fringe benefits provided where the operating cost method has been used.
    • 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
       
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Leave this field blank – it should not be completed.
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of car fringe benefits provided valued using the operating cost method. That is (a) - (b).
    • If the total of the employee contributions received are greater than the gross taxable value of benefits provided, show zero here.
    • If the amount at employee contributions (b) is greater than the gross taxable value (a), show zero. Don't show a negative number.

    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 2020. 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 2020 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).

    How to complete item 23C

    Number
    • Write the number of loans you made that gave rise to taxable fringe benefits.
    • Don't write the total number of loan fringe benefits provided.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the loan fringe benefits, before any reductions (for example, because of the otherwise deductible rule).
    • Show the amounts before any gross-up calculation. Don't use grossed-up amounts.
    • If there are no reductions, copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c )).
    Employee contributions (b)
    • Leave this field blank – it should not be completed.
    Value of reductions (c)
    • Write at (c) the total amount of reductions in the taxable value of loan fringe benefits provided. The taxable value may have been reduced under the otherwise deductible rule.
    • Don’t use the otherwise deductible rule unless both of the following apply:      
      • the recipients of the benefits are current employees
      • you obtain from employees, before your return is due or by 25 June 2020, any supporting documents (for example, employee declaration).
       
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of loan fringe benefits provided. That is, (a) − (c).
    • If the total of the reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't show a negative number.

    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 2019 is:

    • $20,000 × 5.37% = $1,074.

    At item 23, Loans granted, write:

    • Number – 1
    • Gross taxable value (a) – 1,074
    • Employee contribution (b) – leave blank
    • Value of reductions (c) – 0
    • Taxable value of benefits is (a) − (b) − (c) = 1,074.

    Extract of Item 23 of 2020 FBT return: 23C Loans granted; Number is 1: Gross taxable value (a) is $1,074, Employee contribution (b) is blank, Value of reductions (c) is $0, Taxable value of benefits is (a) - (b) - (c) is $1,074.

    End of example

    See also:

    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.

    How to complete item 23D

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the debt waiver fringe benefits. That is, the amount of debt that you waived.
    • Show the amounts before any gross-up calculation. Don't use grossed-up amounts.
    • There are no employee contributions or reductions, so copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c)).
    • Don't include amounts that you write off as a genuine bad debt. A debt owed by an employee that you write-off as a genuine bad debt is not a debt waiver fringe benefit.
    Employee contributions (b)
    • Leave this field blank – it should not be completed.
    Value of reductions (c)
    • Leave this field blank because it should not be completed. There are no other reductions that can apply in respect of debt waiver fringe benefits.
    Taxable value of benefits (a) − (b) − (c)
    • Write the same figure that was written at 'Gross taxable value (a)' in this column. Don't input a different figure.

    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 2020 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.

    How to complete item 23E

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the expense payment fringe benefits before any reductions (for example, the otherwise deductible rule).
    • Show the amounts before any gross-up calculation. Don't show grossed-up amounts.
    • Use GST inclusive amounts where applicable.
    • If there are no employee contributions or reductions, copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c)).
    Employee contributions (b)
    • Write the sum of all employee contributions made toward expense payment fringe benefits provided.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Write at (c) the total amount of reductions in the taxable value of expense payment fringe benefits provided. The taxable value may have been reduced:      
      • under the otherwise deductible rule
      • by other means (for example, in relation to in-house benefits).
       
    • The 'otherwise deductible rule' only applies if both of the following apply:      
      • the recipients of the benefits are current employees
      • you obtain from employees, before your return is due or by 25 June 2020, any supporting documents (for example, employee declaration).
       
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values expense payment fringe benefits provided. That is (a) − (b) − (c).
    • If the total of the employee contributions (b) and reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't write a negative number.

    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 2020. On 31 March 2020, 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 2020 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.

    How to complete Label 23F

    Number
    • Write the number of units of accommodation used to provide the housing fringe benefits. Don't write the total number of housing fringe benefits provided.
    • Don't include housing benefits provided in a remote area that are exempt from FBT. Exempt benefits are not included on the FBT return.
    • Don't include other accommodation provided that does not meet the requirements of a housing fringe benefit. Providing this type of accommodation is a residual fringe benefit and is shown at 'M Other benefits (residual)'.
    Gross taxable value (a)
    • Write the sum of the taxable values of the expense payment fringe benefits before any employee contributions.
    • Show the amounts before any gross-up calculation. Don't show grossed-up amounts.
    • If there are no employee contributions, copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c)).
    Employee contributions (b)
    • Write the sum of all employee contributions made toward housing fringe benefits provided.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Leave this field blank – don't write anything in this field.
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of housing fringe benefits provided. That is (a) − (b).
    • If the total of the employee contributions (b) are greater than the gross taxable value of benefits provided (a), show zero here. Don't write a negative number.

    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 2020. 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 2020 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 of employment require them to live away from their normal residence.

    How to complete Label 23G

    Number
    • Write the number of employees who received a living-away-from-home allowance. Don't write the total number of living-away-from-home allowance fringe benefits provided.
    Gross taxable value (a)
    • Write the sum of the taxable values of the living-away-from-home allowance fringe benefits before any reductions.
    • The total amounts shown should include the exempt accommodation component, exempt food component 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.
    • The amounts shown should be the amounts before any gross-up calculation. Don't use grossed-up amounts.
    • If there are no reductions, include the gross taxable value figure (a) in the 'Taxable value of benefits (a) − (b) − ( c)' column.
    Employee contributions (b)
    • Leave this column blank. Employee contributions can't be provided in respect of a living-away-from-home allowance fringe benefit under the FBT law.
    Value of reductions (c)
    • Write at (c) the total amount of reductions in the taxable value of living-away-from-home allowance fringe benefits. The exempt accommodation and exempt food components should be included at (c).
    • Don't include at (c) any exempt accommodation and exempt food components more than the Commissioner of Taxation's reasonable amount unless you have the necessary documentary evidence or declaration of employee expenses and the declaration about living away from home.
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of living-away-from-home allowance fringe benefits provided. That is (a) − (c).
    • If the total of the reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't show a negative number.

    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 2020. They receive $591 per week ($30,732 for the year) as a living-away-from-home allowance. Their duties of employment require them to live away from their normal residence.

    Their allowance 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. 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. They declare they have spent no more than the Commissioner's reasonable food amount and, therefore, are not required to substantiate their expenditure. They provide you with a living away from home declaration – employee who maintains an Australian home – on 20 April 2020.

    The employee started living at this location in January 2019. 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 2019. 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 2020 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.

    How to complete Label 23J

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the board fringe benefits provided.
    • The amounts shown should be amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Include board meals provided where you contract an employee's services to another person who provides the employee with board meals on their premises. The meals in this case are board fringe benefits and you still have the FBT liability.
    • If there are no employee contributions (b) or reductions (c), write the gross taxable value figure (a) in the 'Taxable value of benefits (a) − (b) − (c)' column.
    • Don't include board meals provided to an employee in a primary production business located in a remote area. These are exempt benefits and are not included in the FBT return.
    • Don't include the following at this item because they aren't board fringe benefits, however they may be property fringe benefits, tax-exempt body entertainment fringe benefits, or meal entertainment fringe benefits:      
      • meals provided at a party, reception or other social function
      • meals provided in a dining facility open to the public (except for board meals provided to employees of a restaurant, motel, hotel, etc)
      • meals provided in a facility mainly used by a particular employee.
       
    Employee contributions (b)
    • Write the sum of all employee contributions made toward board fringe benefits provided.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)

    Write the sum of all reductions that apply to board fringe benefits provided.

    The taxable value of the board fringe benefit is reduced to nil if both of the following apply:

    • you provide a board fringe benefit to an employee
    • they would have been entitled to an income tax deduction if they had paid for the meal.

    Don't apply the 'otherwise deductible rule' unless both of the following apply:

    • the recipients of the benefits are current employees
    • you obtain from employees, before your return is due or by the 25 June 2020, any supporting documents (for example, employee declaration).
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of board fringe benefits provided. That is (a) − (b) − (c).
    • If the total of the employee contributions (b) and reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't show a negative value.

    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 2020. You don’t require your employees to make a contribution towards their board meals and their accommodation. They 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 2020 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.

    How to complete Label 23K

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the property fringe benefits.
    • The amounts shown should be amounts before any gross-up calculations. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • If there are no employee contributions (b) or reductions (c), copy the gross taxable value figure (a) to the 'Taxable value of benefits (a) − (b) − (c)' column.
    Employee contributions (b)
    • Write the sum of all employee contributions made toward property fringe benefits provided.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Write at (c) the total amount of reductions in the taxable value of property fringe benefits provided. The taxable value may have been reduced:      
      • under the otherwise deductible rule
      • by other means - for example, in relation to in-house fringe benefits.
       
    • The 'otherwise deductible rule' only applies if both of the following apply:      
      • the recipients of the benefits are current employees
      • you obtain from employees, before your return is due or by the 25 June 2020, any supporting documents (for example, employee declarations, receipts or invoices).
       
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of property fringe benefits provided. That is (a) − (b) − (c).
    • If the total of the employee contributions (b) and reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't write a negative number.

    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 2020. 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 2020 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 any of the following apply:

    • you are wholly exempt from income tax - for example, a club that earns income from members only
    • you are partially exempt from income tax - for example, a club that earns income from both members and non-members
    • you did not get assessable income from the activities to which the entertainment relates.

    How to complete Label 23L

    Number
    • Leave this column blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the tax-exempt body entertainment fringe benefits.
    • The amounts shown should be amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • Include tax-exempt body entertainment provided under a salary sacrifice arrangement at this item – you can't choose to value it as a meal entertainment fringe benefit.
    • Copy the gross taxable value figure to the far right hand column (Taxable value of benefits (a) − (b) − (c )).
    • Don't include meal and entertainment facility leasing expense benefits not provided under a salary sacrifice arrangement at this item if you are a not-for-profit employer, who is eligible for the FBT capping exemption or FBT rebate. These employers 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 have chosen to value food and drink that is tax-exempt body entertainment using the meal entertainment valuation rules, don't include them here. Include these benefits under 'P Meal entertainment'.
    • If you are not exempt from income tax and you provided entertainment, don't complete this item. 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.
    Employee contributions (b)

    Leave this field blank. Employee contributions can't be provided in respect of a tax-exempt body fringe benefit under FBT law.

    Value of reductions (c)
    • Leave this field blank. There are no reductions in respect of tax-exempt body entertainment fringe benefits under FBT law.
    Taxable value of benefits (a) − (b) − (c)
    • Write the same figure as at 'Gross taxable value (a)' in this column. Don't use a different figure.

    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 2020 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.

    How to complete Label 23M

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the residual fringe benefits.
    • The amounts shown should be amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • If you choose to value entertainment facility leasing expense benefits not provided under a salary packaging arrangement under the 50-50 method, you must include the value of these benefits at this item.
    • If there are no employee contributions (b) or reductions (c), copy the gross taxable value figure (a) to the 'Taxable value of benefits (a) − (b) − (c)' column.
    Employee contributions (b)
    • Write the sum of all employee contributions made for residual fringe benefits.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Write at (c) the total amount of reductions in the taxable value of residual fringe benefits provided. The taxable value may have been reduced:      
      • under the otherwise deductible rule
      • by other means – for example, in relation to in-house fringe benefits.
       
    • Don't reduce the value using the otherwise deductible rule unless both of the following apply:      
      • the recipients of the benefits are current employees
      • you obtain from employees, before your return is due or by 25 June 2020, any supporting documents (for example, employee declarations, receipts or invoices).
       
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of the residual fringe benefits provided. That is (a) − (b) − (c). If the total of the employee contributions (b) and reductions (c) are greater than the gross taxable value of benefits provided (a), show zero here. Don't write a negative number here.

    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 2020. Your employee uses the utility for both business and private purposes. On 1 May 2020 your employee provides you with a declaration stating that they used the utility 25% of the time for private purposes. They have 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 2020 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.

    How to complete Label 23N

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the car parking fringe benefits.
    • The amounts shown should be amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • If there are no employee contributions (b) copy the gross taxable value figure (a) to the 'Taxable value of benefits (a) − (b) − (c)' column.
    Employee contributions (b)
    • Write the sum of all employee contributions made for car parking fringe benefits.
    • Don't include employee contributions that will be made after this return has been lodged, unless the contribution is made by journal entry in your accounts.
    • Don't use any excess employee contributions for one benefit type to reduce the taxable value of other benefits you provided to that employee or other employees.
    Value of reductions (c)
    • Leave this field blank. There are no reductions that can apply for car parking fringe benefits.
    Taxable value of benefits (a) − (b) − (c)
    • Write the sum of the taxable values of the car parking fringe benefits provided. That is (a) − (b).
    • If the total of the employee contributions (b) is greater than the gross taxable value of benefits provided (a), show zero here. Don't show a negative number.

    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 2020.

    Your employees use the parking spaces for more than four hours during the working day. There are several commercial parking stations within a kilometre charging more than $10 a day on 1 April 2019.

    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 2020 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

    See also:

    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 2016.

    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 2020 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.

    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 25 June 2020 unless we have allowed you to lodge later.

    How to complete Label 23P

    Number
    • Leave this field blank – it should not be completed.
    Gross taxable value (a)
    • Write the sum of the gross taxable values of the meal entertainment fringe benefits.
    • The amounts shown should be amounts before any gross-up calculation. Don't use grossed-up amounts.
    • Use GST-inclusive amounts where applicable.
    • Copy the gross taxable value figure (a) to the 'Taxable value of benefits (a) − (b) − (c)' column.
    • Don't include meal entertainment benefits not provided under a salary sacrifice arrangement at this item if you are a not-for-profit employer, who is eligible for the FBT capping exemption or FBT rebate. These employers 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.
    • Don't include entertainment provided under a salary sacrifice arrangement at this item because you can't make the meal entertainment election in this case. The benefits will need to be valued as tax-exempt body, expense payment, property or residual benefits depending on how the benefit was provided.
    Employee contributions (b)
    • Leave this field blank. Employee contributions can't be provided as a meal entertainment fringe benefit under the FBT law.
    Value of reductions (c)
    • Leave this field blank. There are no reductions for meal entertainment fringe benefits under the FBT law.
    Taxable value of benefits (a) − (b) − (c)
    • Write the same figure that was written at Gross taxable value (a) in this column. Don't input a different figure.

    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 2020. You elect on 1 April 2020 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 2020 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

    See also:

    Next steps:

    Last modified: 24 Jun 2020QC 61882