FBT Deadline Approaching: What Employers Need to Know
Fringe Benefits Tax (FBT) operates on its own calendar, running from 1 April to 31 March each year. That means the end of this FBT year—31 March—is fast approaching!
What is FBT?
FBT is separate from income tax, with its own rules and deadlines. It is paid by employers on certain benefits—often called “perks”—provided to employees. These benefits can include:
✅ Gym memberships
✅ Parking spaces
✅ Work vehicles
✅ Payment of school fees
✅ Entertainment and accommodation expenses
However, FBT does not apply to:
❌ Salaries and wages
❌ Shares provided under approved schemes
❌ Superannuation contributions
The ATO provides a comprehensive list of fringe benefits, along with exemptions and concessions that may reduce or eliminate your FBT liability. For example, employer-provided electric vehicles that meet specific criteria are exempt from FBT.
FBT Exemptions & Concessions
There are many situations where employers don’t have to pay FBT. A common exemption applies to portable electronic devices such as laptops or mobile phones provided to employees, especially for remote workers. Other work-related items, such as protective clothing for tradies, may also be FBT-free. Always check the specific conditions that apply!
How Do You Calculate FBT?
Once you’ve identified which benefits are subject to FBT, you’ll need to “gross up” the taxable value. This ensures that the tax paid on fringe benefits is equivalent to the tax that would have applied if the employee received the benefit as salary.
The gross-up rates are:
- 2.0802 if you can claim a GST credit
- 1.8868 if you can’t claim a GST credit
To calculate your FBT liability:
1️⃣ Multiply the taxable value of the benefit by the applicable gross-up rate
2️⃣ Multiply that amount by the FBT rate of 47%
3️⃣ Lodge your FBT return and pay what you owe
The Good News
Employers who pay FBT can generally claim it as an income tax deduction in the financial year the payment is made. If applicable, you may also be able to claim:
✅ A GST credit on the benefit
✅ A tax deduction for the cost of the benefit itself
Key Lodgment Dates
📅 21 May – If you’re lodging your FBT return yourself
📅 25 June – If you’re using a registered tax agent and are on their lodgment program by 21 May
Need Help?
FBT is a complex area of tax law, but with expert guidance, you can navigate the rules and optimise your business’s tax position. If you’re unsure about your obligations or want to explore exemptions, seek professional advice before the deadline approaches!
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.