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Effect of nominating a body as an FBT employer

What happens when a state or territory nominates a body as an employer for the purpose of administering and paying FBT.

Last updated 11 January 2023

State and territory governments are ultimately responsible for the fringe benefits tax (FBT) obligations of their government.

However, state and territory governments can transfer the administration and payment of FBT to a departmental level.

To transfer these FBT responsibilities, the state or territory must nominate the relevant body as an employer for FBT purposes.

A state or territory department will not be an employer for FBT purposes unless it has been nominated by the relevant state or territory.

Once a nomination has been made, the nominated body is treated as:

  • the employer of each employee who has a sufficient connection with that body
  • a company for the purposes of the FBT law
  • an associate of
    • any other nominated state or territory body of the relevant state or territory
    • the state or territory
    • any authority of the state or territory.

The nomination can specify that certain classes of employees who work for other bodies have a sufficient connection with the nominated state or territory body. These employees would then be treated as employees of the nominated body for FBT purposes.

A nomination must be made by 21 May of the relevant year, and will always apply from 1 April of the first year in which the body is to be treated as an employer.

A nomination only needs to be made for the first year in which the body is to be treated as an employer.