- allow an employee to use a work car for private purposes
- give an employee a cheap loan, or
- pay an employee’s private health insurance costs or gym membership
Non Benefits, for FBT – The following are not fringe benefits:
- payments of salary or wages
- shares acquired under approved employee share acquisition schemes
- employer contributions to complying superannuation funds
- eligible termination payments (for example, a company car given or sold to an employee on termination), or
- certain benefits provided by religious institutions to their religious practitioners.
Who Pays FBT?
As an employer, you have to pay FBT, even if the benefit is provided by an associate or by a third party under an arrangement with you. For example, you may deal with a supplier who, in turn, provides free goods to your employees.
It makes no difference whether you are a sole trader, partnership, trust, corporation, unincorporated association or government body, or whether you have to pay other taxes such as income tax.
Do you provide fringe benefits to yourself?
If you are a director and conduct your business through a company or a trust, you may be an employee of the company or the trust. This may mean that you are actually providing fringe benefits to yourself and so need to understand your company’s or trust’s FBT obligations.
Are you providing fringe benefits?
The following checklist will help you work out if you are already providing a fringe benefit to your employees. If you answer yes to any of the following questions, you may have an FBT liability.
Do your employees take cars home and garage them overnight, even if only for security reasons?
Do you make a car or other vehicles owned or leased b the business available to employees for private use?
Do you provide loans at reduced interest rates to employees?
Have you released any employees from a debt the owned?
Have you paid for, or reimbursed, a non-business expense incurred by an employee?
Do you provide a house or unit of accommodation to your employees?
Do you provide employees with living-away-from-home allowances?
Do you provide entertainment by the way of food, drink or recreation to your employees?
Do any of your employees have a salary package arrangement in place?
Have you provided your employees with goods at a lower price than they are normally sold to the public?
For a quick guide see the ATO site http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/33353.htm&page=2&H2
For more on Benefits to employees, see our post https://accountkeepingplus.wordpress.com/2011/04/09/benfits-to-employees-in-australia-what-is-allowed/