• FBT exemption

    An FBT exemption is an exemption from paying FBT.

    If your organisation is eligible for FBT exemption, benefits it provides its employees are exempt from FBT if the total grossed-up value of certain benefits 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 an employee is more than the capping threshold, your organisation will need to pay FBT on the excess.

    The table below outlines the types of organisations that are eligible for FBT exemption, the capping thresholds that apply and whether the organisation needs to be endorsed by us to access FBT exemption.

    Table: 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 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

    Notes to table

    1. A range of benefits are exempt from FBT. They include certain benefits provided by religious institutions and non-profit companies. A religious institution and a non-profit company that is a charity must be registered with the Australian Charities and Not-for-profits Commission (ACNC) to access the exemption for such benefits.
    2. The $30,000 capping threshold applies (the threshold changes to $31,177 for the FBT years ending 31 March 2016 and 2017 only) even if the PBI or 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.

      If an organisation is a PBI and a hospital, the $17,000 capping threshold applies (the threshold changes to $17,667 for the FBT years ending 31 March 2016 and 2017 only). The organisation cannot choose the PBI exemption cap.
    3. A condition of our endorsement is that PBIs and HPCs must be registered with the ACNC as a PBI or HPC to access the FBT exemption.

    See also:

    Last modified: 20 Jul 2015QC 46331