In-house fringe benefits – tax-free threshold

Legislative reference: section 62External Link of the FBTAA.

If you provide one or more in-house fringe benefits to an employee during the FBT year, you may reduce the aggregate of the taxable values of the in-house fringe benefits by $1,000.

Broadly, in-house fringe benefits are benefits that are identical or similar to the benefits you provide to customers in the ordinary course of business.

This concession applies only to:

  • in-house expense payment fringe benefits
  • in-house property fringe benefits
  • in-house residual fringe benefits
  • airline transport fringe benefits.

You don't need to keep specific records of in-house benefits provided to individual employees if you don't expect the value of the benefits provided in the year to exceed the $1,000 limit.

If a particular fringe benefit is eligible for both this concession and another concession outlined in this chapter, you reduce the taxable value first by the other concession, and then by this concession.

In-house fringe benefits – tax-free threshold where the benefit is accessed under a salary packaging arrangement

Since 22 October 2012, the $1,000 annual reduction of the aggregate taxable value has not applied to in-house benefits where the employee accesses the benefit under a salary packaging arrangement.

This reduction continues to apply if either:

  • the transitional rules apply
  • the benefit is not accessed under a salary packaging arrangement.

See section 17.3 of Property fringe benefits and section 18.4 of Residual fringe benefits for information about the transitional rules and what is a salary packaging arrangement.

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    Last modified: 25 Jan 2016QC 17819