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  • FBT exemption

    Your not-for-profit organisation may be exempt from FBT if it is a:

    • registered public benevolent institution (other than public and not-for-profit hospitals) endorsed by the ATO
    • registered health promotion charity endorsed by the ATO
    • public or not-for-profit hospital
    • public ambulance service.

    Capping thresholds apply to organisations that are eligible for FBT exemption. The threshold amount depends on the type of organisation.

    Benefits provided are exempt from FBT if the total grossed-up value of certain benefits (which are benefits that are not otherwise exempt) provided for each employee during the FBT year is equal to, or less than, the capping threshold.

    If the total grossed-up value of fringe benefits provided to any employee is more than the capping threshold, your organisation will need to report the details and pay FBT on the excess.

    The table below outlines the capping thresholds that apply and which organisations need to be endorsed by us to access FBT exemption.

    Table 1: Types of organisations eligible for FBT exemption

    Types of organisations eligible for FBT exemption
    (see Note 1)

    Capping threshold
    (see Note 2)

    Does the organisation need to be endorsed by us to access FBT exemption?
    (see Note 3)

    Public benevolent institutions (PBIs) other than public and not-for-profit hospitals

    $30,000 per employee

    Yes

    Health promotion charities (HPCs)

    $30,000 per employee

    Yes

    Public and not-for-profit hospitals

    $17,000 per employee

    No

    Public ambulance services

    $17,000 per employee

    No

    Note 1: A range of benefits that are exempt from FBT include certain benefits provided by religious institutions and not-for-profit companies.

    Note 2: The $30,000 per employee capping threshold (which changes to $31,177 for the FBT years ending 31 March 2016 and 2017 only) applies even if the public benevolent institution (PBI) or health promotion charity (HPC) did not employ the employee for the full FBT year. For example, if you employed the employee between October and March and the total grossed-up value of benefits provided was $25,000, FBT will not be payable.

    The $17,000 per employee capping threshold (which changes to $17,667 for the FBT years ending 31 March 2016 and 2017 only) applies if an organisation is a PBI and a public or not-for-profit hospital. The organisation cannot choose the PBI exemption cap. The term ‘public hospital’ includes government-run hospitals and most not-for-profit privately run hospitals operating for the benefit of the public. Whether a hospital is a public hospital is a question of fact, taking all circumstances into account. A major factor is whether its purpose is directed toward the public, not whether it is publicly or privately controlled. The term ‘not-for-profit hospital’ includes not-for-profit hospitals operated by a charity.

    Note 3: Before we can endorse PBIs and HPCs to access charity tax concessions, they must be registered with the ACNC as a charity.

    If an organisation exceeds the capping threshold for any employee, details of fringe benefits provided to all employees will need to be reported, not just the details for the employee that exceeded the exemption cap.

    See also:

    Last modified: 12 Feb 2020QC 46331