Reportable fringe benefits – facts for employees
This information is for employees who receive fringe benefits from their employer and have the taxable value of those benefits recorded on their payment summary.
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When do you have a reportable fringe benefits amount?
If the total taxable value of certain fringe benefits provided to you or your associate (for example, a relative) exceeds $2,000 in an FBT year (1 April to 31 March), the grossed-up taxable value of those benefits are recorded by your employer on your payment summary for the corresponding income year (1 July to 30 June). This value is known as your reportable fringe benefits amount.
The total amount of reportable fringe benefits you receive from all your employers for a year is called your reportable fringe benefits total.
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 2016. From 1 April 2016 to 15 May 2016, 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 2017. Joan's employer has until 14 July 2017 to issue the payment summary.
End of example
What benefits are reported on your payment summary?
Some fringe benefits do not have to be reported on your payment summary.
These benefits are called excluded benefits and can include:
- car parking fringe benefits
- remote area housing assistance, home ownership schemes, and repurchase schemes
- if you live in a remote area, costs of occasional travel to a major Australian population centre
- benefits you receive to ensure your security and personal safety because of your job
- emergency or other essential health care you receive as an Australian citizen or permanent resident while you are working outside Australia and you cannot claim a Medicare benefit
- certain benefits provided to you if you are a
- defence force member
- police officer
- car benefits coming from your private use of pooled or shared cars.
Meal entertainment and entertainment facility leasing benefits provided to you from 1 April 2016 under a salary sacrifice arrangement will now be reported on your payment summary.
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How is your reportable fringe benefits amount calculated?
Your employer calculates your reportable fringe benefits amount by multiplying the taxable value of the fringe benefits provided to you or your associate by the lower gross-up rate. The lower gross up rate for the FBT years ending 31 March 2016 and 2017 is 1.9608. For example, if the taxable value of your fringe benefits is $2,000.01, your reportable fringe benefit amount is $3,921.
The reportable fringe benefit amount reflects the gross salary that you would have to earn to purchase the benefit from your after tax income.
Example: working out amounts for payment summaries
Between 1 April 2016 and 31 March 2017 (the 2017 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 2017.
The rate of FBT for the year ended 31 March 2017 is 49%, so the grossed-up amount reported on Tim's payment summary is $6,470. This is calculated as follows:
Total taxable value
1 minus the FBT rate
1 - 0.49
End of example
- Reporting amounts on payment summaries – examples for employers
What are the consequences of having fringe benefits reported on your payment summary?
Even though a reportable fringe benefits amount is included on your payment summary and is shown on your tax return, you do not:
- include it in your total income or loss amount
- pay income tax or Medicare levy on it.
Your reportable fringe benefits amount is used for:
- calculating your liability to the Medicare levy surcharge
- determining if you can claim a deduction for personal superannuation contributions you made
- determining your eligibility for the government co-contribution for personal superannuation co-contributions you made
- determining your eligibility for family assistance payments (Family Tax Benefit Part A and Part B, Child Care Benefit for approved care, Parental Leave Pay, Dad and Partner Pay and Schoolkids Bonus)
- working out if you are entitled to reduce your employee share scheme discount
- working out the amount you must repay against your Higher Education Loan Program (HELP) or Student Financial Supplement Scheme (SFSS) debt
- determining your entitlement to a tax offset for
- contributions you made to your spouse's super
- invalid and invalid carer
- zone or overseas forces
- net medical expenses
- Medicare levy surcharge (lump sum payment in arrears)
- seniors and pensioners
- working out your child support obligations
- working out your entitlement to claim low income supplement or low income family supplement
- determining whether you can offset your business loss against other income.
How can you reduce your reportable fringe benefits amount?
You can reduce the amount of fringe benefits shown on your payment summary for future years by:
- arranging with your employer to replace your fringe benefits with cash salary
- making employee contributions out of your after-tax income towards the cost of the benefits.
What are employee contributions?
Information to help employees understand the reportable fringe benefits amount included on their payment summary.
- Employee contributions are a payment you make towards the cost of your employer providing a fringe benefit.
- Generally, you make a cash payment to your employer or the person who provided the benefit.
- For example, you can make an employee contribution towards a car fringe benefit by paying a third party for some of the operating costs (such as fuel) that your employer does not reimburse.