The Fringe Benefits Tax (FBT) year ends on 31 March of each year which means that the year end has just ticked over.
What are fringe benefits?
Fringe benefits are those non-salary ‘benefits’ or payments that you make to employees. Common examples are:
the use of a work car for private purposes
a discounted loan to an employee
providing a gym membership
free tickets to concerts or other events
reimbursing personal expenses
What is Fringe Benefits Tax?
FBT is separate from income tax and is assessed to the employer and not the employee. Essentially it tries to make sure that tax obligations are not avoided by providing fringe benefits to employees in the place of their salary.
Minor benefits exemption
The FBT regime does make some allowance for small rewards and benefits provided to employees.
Essentially, a minor benefit is a benefit with a value of less than $300 and will (broadly speaking) generally be exempt from FBT if it is provided infrequently and irregularly.
What do you have to do?
If you have provided fringe benefits to your employees during the twelve months ended 31 March 2021 you will need to prepare and lodge an FBT return with the Australian Taxation Office (ATO) by 25 June 2021.
As with any area of the tax law, there is a lot more complexity than what I can cover in this brief overview. For a wider discussion about your FBT obligations, please contact us.
