Fringe Benefits Tax

Fringe benefits are non-cash benefits provided by employers as a reward to employees or their associates. These benefits include providing interest-free loans, low-cost accommodation, and motor vehicles for employees’ private use. It also generally covers any ‘arrangement’ involving a third party.

If you are an employer, you are liable to pay FBT if you provide employees with a fringe benefit during 1 April to 31 March. As with most areas involving tax, the operation of the FBT system contains several complexities and exceptions. However, you will most likely be required to pay FBT at a rate of 47 per cent for the year ending 31 March 2025, on the value of the benefit provided. Because you pay the tax, the value of the benefit is not taxable in the hands of your employees, although the cost is often treated as part of the employee’s remuneration package. More information about the FBT is available on the ATO website or business infoline (13 28 66).

Fringe Benefits Tax

Chapter: 5.5: Taxation

Contributor: Daniel Smedley, Principal and Accredited Tax Law Specialist, Sladen Legal

Current as of: 1 September 2024

Law Handbook Page: 355

Next Section: Goods and Services Tax