Fringe benefits explained
A fringe benefit is a benefit either you or an associate, such as your spouse or children, receive because of your employment. You can be a current, former or future employee.
When we say benefit, we mean any right (including any property right), privilege, service or facility you receive. A benefit could be:
- the use of something, such as a car, house or equipment
- ownership of something, such as items of clothing
- enjoyment of a privilege or facility, such as staying at a holiday home.
When we say benefits provided by your employer, we mean benefits provided by your employer, your employer's associate or a third party acting under an arrangement with your employer.
When we say benefits provided to you, we mean benefits provided to you or your associate.
For example, you could receive a benefit when your employer gives you:
- a work car for private purposes
- a cheap loan
- free private health insurance
- home cleaning services.
You could also receive a benefit if you enter into a salary sacrifice arrangement.
Exempt work-related items
A number of employee benefits are exempt from fringe benefits tax (FBT), including the following work-related items:
- portable electronic devices such as mobile phones, laptops, tablets, portable printers and GPS navigation receivers
- computer software
- protective clothing
- tools of trade.
The FBT exemption is limited to:
- items primarily for use in the employee's employment
- one item per FBT year for items that have a substantially identical function, unless the item is a replacement item.
From 1 April 2016, the FBT exemption will be allowed for to small businesses (with an aggregate annual turnover of less than $2 million) that provide employees with more than one work-related portable electronic device in an FBT year, even if the devices have substantially identical functions.
The exemption is limited to:
- items mainly for work-related use
- one item per FBT year (1 April to 31 March) for items that have a mostly identical function, unless the item is a replacement item.