Perk or fringe benefit?
It's not just salary and wages that matter.
Perks can be great for attracting, rewarding and retaining staff. But some perks are considered 'fringe benefits' and could create fringe benefits tax (FBT) obligations for your business.
A fringe benefit is like a payment to your employee in addition to their salary or wages, but in a non-cash form. It also counts if you provide perks to your employees' family members or other associates. If a perk you're providing is a fringe benefit, FBT could be attached and your business may need to pay it.
Knowing what counts as a fringe benefit can make it easier to understand your obligations and get it right.
Could the perks you provide attract FBT?
Some perks you provide employees may attract FBT. You may be providing them without realising FBT applies.
For example, you might:
- allow an employee to take a work vehicle home, or use it on weekends
- provide an employee with car parking
- pay for gym memberships as part of an employee wellbeing program
- give an employee tickets to a concert to recognise their hard work
- reimburse an employee for self-education expenses they paid for
- provide staff and their associates with food and drinks at a staff party
If any of these sound familiar, they may attract FBT. Review the perks you provide to understand whether FBT applies.
What to do next
Unsure whether the perks you provide could attract FBT?
A good place to start is to review the perks you provide beyond salary and wages. Ask yourself:
- Do we provide employees with any benefits in addition to salary and wages?
- Do employees receive perks for personal use?
- Have we recently introduced any new perks or benefits for employees?
If you answered 'yes' or 'not sure' to any of these, take a closer look to understand if FBT applies and the obligations your business needs to meet.
Take the first step to working out your FBT obligations and explore the common benefits to learn when FBT may apply.
Support and resources
Need help working it out? A registered tax professional can help you identify the fringe benefits you may be providing, whether FBT applies and how to meet your FBT obligations.
We also have free resources, information, tools and guidance to help you understand and manage your FBT obligations, including:
- Fringe benefits tax – a guide for employers for detailed guidance on FBT
- Small business tax super and youExternal Link short courses to help you build your FBT knowledge
- practical information, tools and resources at Fringe benefits tax (FBT).
Authorised by the Australian Government, Canberra.