February 2015
Fringe Benefits Tax (FBT)
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The Fringe Benefits Tax (FBT) year ends the 31st March and now is the time to ensure
that you are on top of your FBT obligations. FBT is payable by any business that
provides benefits other than cash salary or wages to employees or their associates, and
includes company directors. Benefits can be provided directly by an employer, an
employer’s associate, or a third party by arrangement with an employer.
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FBT is separate from income tax and is based on the taxable value of the various fringe
benefits provided.
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FBT categories
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The following categories of fringe benefits apply, with specific valuation properties applicable
to each category:

Car fringe benefits

Car parking fringe benefits

Entertainment fringe benefits
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Expense payment fringe benefits
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Loan fringe benefits
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Debt waiver fringe benefits
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Housing fringe benefits
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Board fringe benefits
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Airline transport fringe benefits
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Living-away-from-home allowance fringe benefits
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Property fringe benefits

Residual fringe benefits
Calculating your FBT liability
Armidale
ph: 6773 8400
Coonabarabran
ph: 6842 0000
Gunnedah
ph: 6743 0800
Narrabri
ph: 6743 0800
Tamworth
ph: 6763 0100
The taxable value of benefits provided is calculated on the GST-inclusive cost to the
employer, less any employee contributions made. The taxable value is then grossed up
according to whether the employer is eligible to an input tax credit when the fringe benefit is
acquired (using a gross-up rate of either 2.0802 if entitled to input tax credits or 1.8868 if not
entitled). FBT then applies at the top marginal rate of tax, which is currently 47%.
A deduction is generally available for the value of benefits provided, and for any FBT liability
paid during the financial year.
Reducing FBT
There are several ways to reduce FBT liabilities. Examples include replacing fringe benefits
with a cash salary, providing benefits that your employees would otherwise be entitled to
claim as an income tax deduction if they had paid for the benefits themselves, or providing
benefits that are exempt from FBT. Another common method of reducing FBT obligations is
through employee contributions.
February 2015
Payment summary disclosure
Where the taxable value of benefits provided to an employee exceeds a total of $2,000 in any
FBT year, the grossed-up value must be disclosed on the employee’s payment summary.
Regardless of the particular circumstances the lower 1.8868 rate is to be used when
calculating the reportable amount.
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Salary packaging opportunities
Not all benefits provided by employers to their employees are taxable. There are several
‘exempt’ benefits that may allow salary packaging opportunities. Examples of exempt
benefits include:

Car benefits where the vehicle is either a taxi, panel van or utility and an employee’s
private use is limited to travel between home and work, incidental travel during the
course of performing work, and minor, infrequent and irregular non-work related travel.

Purchases of certain work-related items primarily for an employee’s use in the
workplace, including portable electronic devices (mobile phones, laptops, tablets etc).
However, the exemption is subject to a limit of one item of each type per employee, per
year.

In-house benefits up to $1,000 per year (e.g. child care facilities).

Housing benefits provided in remote areas (subject to a number of conditions).

Relocation expenses arising from employees moving as a result of taking on a new job.

Minor and infrequent benefits that might be regarded as a ‘perk’ (e.g. staff awards).
There is also a small window of opportunity for high income earners to avoid the budget
repair levy which applies during the 2015, 2016 and 2017 financial years, where an
individual’s taxable income exceeds $180,000. The FBT rate is affected by the 2% levy,
however it does not apply until the 1st April 2015. Therefore, high income earners can
effectively avoid the levy by salary packaging fully taxable fringe benefits before the 31st
March 2015.
Further information
Armidale
ph: 6773 8400
Coonabarabran
ph: 6842 0000
The 2015 FBT returns are due for lodgement on the 21st May 2015. Please ensure that all
relevant documentation, including log books, are up to date by the 31st March 2015. For
more information or assistance in regards to your fringe benefits tax obligations, please
contact your local Forsyths office.
The Forsyths Team
Gunnedah
ph: 6743 0800
Narrabri
ph: 6743 0800
Tamworth
ph: 6763 0100
This document has been prepared for general information only and is not intended as personal
advice. Any statements of law or proposals are based on Forsyths' interpretation as at the
date of issue. Accounting & business services are provided by Forsyths Business Services Pty
Ltd ABN 66 182 781 401, liability is limited under a scheme approved under Professional
Standards Legislation. Financial advice provided by Forsyths Financial Services Pty Ltd, ABN
89 103 898 988 AFSL no. 259938 does not take into account your individual financial
objectives, financial situation or needs. You should consider these before making a financial
decision. We recommend you consult a licensed financial adviser who will assist you. You
should also obtain a copy of and consider the product disclosure statement for any financial
product mentioned before making any decision to acquire that product.