• 1.5 What is not subject to FBT?

    Not all benefits provided in respect of employment are fringe benefits. The FBT legislation excludes certain benefits from being fringe benefits. These include the following:

    Salary or wages

    Payments of salary or wages are not fringe benefits. The term 'salary or wages' means a payment from which an amount of tax must be withheld.

    Employee share schemes

    Benefits provided to employees from the acquisition of shares or rights to acquire shares, are not fringe benefits if the share acquisition scheme conforms to the necessary income tax requirements. This exemption extends to relatives of employees.


    The following are not fringe benefits:

    • contributions you make to a complying superannuation fund for an employee, To have reasonable grounds for believing a fund is a complying superannuation fund, you must obtain an appropriate written statement from the fund trustee
    • contributions you make to a foreign superannuation fund for superannuation benefits for an employee where the employee is a temporary resident when the contribution is made
    • payments you make to a retirement savings account held by an employee.

    However, superannuation contributions you make for an associate of an employee are subject to FBT.

    Employment termination payments

    Employment termination payments are not fringe benefits. Broadly, employment termination payments are payments made as a result of terminating the employment of an employee (for example, a lump sum paid on retirement). Property you transfer to an employee in relation to terminating their employment is an employment termination payment (for example, a company car you give or sell to an employee on termination).

    Payments of a capital nature

    Payments of a capital nature for a legally enforceable contract in restraint of trade, or for personal injury to a person, are not fringe benefits.


    Payments of amounts that are dividends are not fringe benefits.

    Payments made to shareholders or their associates of a private company are fringe benefits if they are made in respect of employment.

      Last modified: 04 May 2017QC 17808