This is a tax designed to ensure that employees do not get a benefit instead of receiving additional wages.
The employer is required to register for Fringe Benefits then deduct and pay the correct amount of tax on these benefits. The employer is required to lodge a Fringe Benefits Return each year if they provide fringe benefits to employees.
The big question is? ARE YOU LIABLE FOR FRINGE BENEFITS?
If you answer ‘yes’ to any of the following questions the chances are that you should be registered for fringe benefits tax and should talk to your accountant at FORSYTHS to review your options.
- Do you allow any employee to use a work car for private purposes?
- Have you paid for or reimbursed any employee for an expense that the tax office would consider their private expense?
- Do you provide accommodation to your employees?
- Do you provide food, drink, gym memberships, Christmas parties, Christmas presents, and staff parties at restaurants or any form of entertainment?
- Do you provide employees with any form of living-away –from home allowances?
- Do you provide discounts on goods and services that are not available to the public in general?
The good news however is that several items are exempt from fringe benefits. These include mobile phones used for the employee’s job, protective clothing used at work, tools of trade, remote area housing.
If you do provide fringe benefits to your employees you will need to keep records showing the taxable value of the fringe benefits.
If the amount provided to any employee is over $1,000.00 then it will need to be on their payment summary (the grossed up taxable value) as a reportable fringe benefit.
An annual FBT return is due after 31 March each year. Payment may be one annual payment when lodging the return or the ATO may require you to make quarterly payments.
If you have any doubts, you should run through these issues with your accountant at FORSYTHS.Tax & Compliance