When you use a fringe benefits tax (FBT) concession, you may need to get an employee declaration to show that you were entitled to the concession.
An employee declaration is a written statement from your employee containing information about their circumstances relating to the fringe benefits they have received (for example, that they are entitled to an income tax deduction).
You keep the declaration with your business records.
Example: substantiating FBT concession with employee declaration
Meghan is a real estate agent. Her employer, AbRealty, reimburses Meghan for the full cost of her home internet service.
Meghan estimates that 40% of her home internet usage is work related. She gives her employer an employee declaration – in this case, a Recurring expense payment fringe benefit declaration. In the declaration she states that 40% of the cost of her home internet service would be income tax deductible for her, if she had paid for it.
- uses the 'otherwise deductible' rule to reduce the taxable value of the fringe benefit by 40%
- keeps the employee declaration with its business records to substantiate the reduction in FBT.
You must obtain all employee declarations by the time your FBT return is due to be lodged. If you don't have to lodge a return, you must have the declarations by 21 May.
Ask your employees to complete the appropriate form from the list of approved employee declaration forms.
You can also accept employee declarations electronically, with the employee's electronic signature. An electronic declaration provided through a secure email or payroll system (that requires the employee to sign in with a password) is acceptable.
For more information about electronic declarations see FBT Guide: 4.9 Electronic declarations.
Keep employee declarations with your business records for 5 years.
You don't need to send employee declarations to us.Why, when and how to get an employee declaration, and how long to keep it in your records.