• Grossed-up taxable value

    The grossed-up taxable value of a benefit you receive is the gross salary that you would have to earn to purchase the benefit from your after tax income.

    This amount is reported to ensure the value of the benefits is consistent with other forms of income on your payment summary.

    Your employer calculates this amount using the FBT rate equal to the highest marginal rate of income tax, plus Medicare levy. For the FBT year ended 31 March 2011, this is 46.5%. For example, a fringe benefit with a taxable value of $2,000.01 is a reportable fringe benefit amount of $3,738.

     

    Attention

    If a reportable fringe benefit amount shown on your payment summary is less than $3,738, check with your employer about how the amount was calculated.

    End of attention

    Even though this amount is included on your payment summary, you do not:

    • include it in your total income or loss amount
    • pay income tax or Medicare levy on it.

    However, it is included in a number of income tests for some government benefits and obligations.

    Example: working out amounts for payment summaries

    Between 1 April 2010 and 31 March 2011 (the 2010-11 FBT year), Tim's employer provided him with a work car. The taxable value of Tim's car fringe benefits is $2,500. Tim and his partner also stay in company coastal accommodation several times a year, with a taxable value of $800.

    The taxable value of Tim's fringe benefits total $3,300. The grossed-up taxable value of these benefits will appear on his payment summary for the income year ending 30 June 2011.

    The rate of FBT for the year ended 31 March 2011 is 46.5%, so the grossed-up amount reported on Tim's payment summary is $6,168. This is calculated as follows:

     Total taxable value 
    1 minus the FBT rate

    =

     $3,300 
    1 - 0.465

    =

    $6,168

    Keeping records

    Your employer must keep records of the value of the fringe benefits they give to you. These benefits only need to be shown on your payment summary if their taxable value is more than $2,000 in a FBT year (1 April to 31 March). This includes benefits your employer provided to any of your associates as part of your employment.

    Working out your share of a benefit

    If you share a fringe benefit with other employees, your employer must work out what portion of the benefit applies to you.

    While the law does not specify any particular method of working this out, the portion of the taxable value allocated to you must reasonably reflect the benefit you received, taking into account all relevant information. Also, the total taxable value of the benefit must be allocated among all the employees the benefit was given to.

    Example: allocating the benefit - holiday package

    An employer gives two employees a holiday package as a fringe benefit. The package is for two people and cannot be taken as two single holidays. The taxable value of the package is $5,000.

    It is reasonable for the employer to allocate half the taxable value of the holiday package to each employee, so each employee's share is $2,500.

    Example: allocating the benefit - residual fringe benefit

    An employer has a motorbike that is used for business purposes and is available for private use by 10 employees who benefit equally from use of the motorbike. The taxable value of the residual fringe benefit is $4,500.

    The employer could calculate each employee's share as:

     Total taxable value 
    Number of recipients

    =

    $4,500
    10

    =

    $450.00

    Finishing employment between 1 April and 30 June

    If you finish your employment between 1 April and 30 June, your employer may have provided you with reportable fringe benefits. Any reportable benefits exceeding a total of $2,000 they provide you with from 1 April of that year must be shown on your payment summary for the income tax year ended 30 June in the following year. This is the case, even though you will not have received any salary or wages from that employer in that following income tax year.

    Your employer has until 14 July following the end of the income year covered by the payment summary to provide you with a payment summary.

    Example: finishing employment

    Joan finishes employment with her employer on 15 May 2011. From 1 April 2011 to 15 May 2011, Joan receives fringe benefits from that employer with a reportable value of $4,000.

    Joan's employer must report this amount on Joan's payment summary for the income year ended 30 June 2012. Joan's employer has until 14 July 2012 to issue the payment summary.

    • Last modified: 20 May 2013QC 16122