Fringe benefits are reported annually on your:
- employees’ payment summaries
- FBT return.
If you provide an employee with fringe benefits (other than excluded benefits) with a total taxable value of more than $2,000 in an FBT year, you must report the grossed-up value on their payment summary for the corresponding income year (1 July to 30 June). This amount is known as a reportable fringe benefits amount.
You must allocate these reportable fringe benefits to the relevant employee, including any fringe benefits provided to their associates. Where employees share a benefit, you have to allocate their respective shares individually. The total value of all benefits provided to a particular employee in an FBT year is known as their individual fringe benefits amount.
You use this formula to calculate the grossed-up amount to show on the payment summary:
Total taxable value x the lower gross-up rate
Regardless of whether you can or cannot claim a GST credit for the benefits provided, use the lower gross-up rate for reporting on employees’ payment summaries.
You must issue a payment summary to everyone you provide reportable fringe benefits to, even if you don’t pay them any salary or wages. For example, if you provide the caretaker of a block of flats with free accommodation instead of a salary, you have to give them a payment summary if the value of that accommodation (the fringe benefit) is more than $2,000.
Even though you don’t have to report excluded benefits on payment summaries, the benefits are still subject to FBT and you must take them into account when calculating how much FBT you have to pay.
Some benefits don’t have to be reported on your employees’ payment summaries. These excluded benefits include:
- car parking, apart from eligible car parking expense payments benefits provided to employees in remote areas that receive concessional treatment
- pooled or shared cars (in some circumstances)
- entertainment provided as food and drink, and benefits associated with that entertainment, such as travel and accommodation (regardless of which benefit type is used to value the benefits); unless provided under a salary packaging arrangement
- costs of hiring or leasing entertainment facilities such as corporate boxes; unless provided under a salary packaging arrangement.
From 1 April 2016, there are changes to the fringe benefits tax treatment of salary packaged entertainment benefits. If you, the employer, provide these benefits to your employees (for example, through the use of a meal card), you need to be aware of these changes:
- all salary packaged entertainment benefits are reportable and will be included on an employee’s payment summary where their reportable fringe benefits amount is more than $2,000 in an FBT year
- the 50-50 split method and 12-week register method cannot be used for valuing salary packaged meal entertainment or entertainment facility leasing expenses.