Fringe Benefits Tax
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What is Fringe Benefits Tax?
Fringe Benefits Tax (FBT) is a Commonwealth tax levied on most non-salary type benefits provided by employers to employees. FBT is paid by UniSA not the employee.
What is a fringe benefit?
A fringe benefit is very broadly defined and includes almost all non-cash remuneration, provided to an employee or an associate of the employee (i.e. a family members).
Categories of FBT
There are a range of benefits that are provided by the University that may be subject to FBT, each with its own special rules and exemptions. Please follow these links for details and/or guidelines on each category of benefit. Where a link is not available, and/or you require more information, please call Kristian Thoroughgood the University of South Australia's Tax Accountant on x21922.
- car benefits - Human Resources vehicle leasing
- expense payment benefits, including further study expenses - expense payment declaration (word 51kb)
- entertainment and meal benefits (word 82kb)
- travel benefits - Travel Guidelines (PDF 197kb - download Adobe Acrobat) and Travel Diaries
- 'other' or residual fringe benefits.
Who pays the FBT?
FBT is a tax paid by the employer (the University). Within UniSA, this tax cost will normally be passed back to the cost centre incurring the expense or benefit. In some specific cases, the FBT cost is passed through to the employee receiving the benefit, (for example through a salary sacrifice arrangement). In other cases, staff are required to reimburse the University some or all of an expense to ensure an FBT liability does not arise (for example where travel has a mixed business and private component).
It is important to note that many types of fringe benefits must be reported on the receiving employee's payment summary. Select this link to find out more about Reportable Fringe Benefits from the ATO website.
How can we reduce the FBT payable?
We can reduce the amount of FBT payable by:
- replacing fringe benefits with cash salary
- providing benefits that employees would be entitled to claim as an income tax deduction if they had paid for the benefits themselves (the ‘otherwise deductible’ rule)
- providing benefits that are exempt from FBT or
- using employee contributions - generally, the payment is a cash payment made to the university by the employee who received the benefit.
What are exempt benefits?
A narrow range of benefits are considered 'exempt' from FBT under the legislation, and will not incur additional tax costs if provided to staff. Access to many of these benefits is subject to particular conditions being satisfied. You should seek advice before providing benefits to staff members to confirm their FBT exempt status. Examples of exempt benefits:
- certain work related items - including lap tops that are provided primarily for work purposes
- minor & infrequent benefits - benefits that are both under $300 in value and infrequently provided, and are not entertainment
- specific costs relating to relocation expenses
- car parking
External information
The ATO is an excellent source of additional information if you would like consider these issues further.
- ATO summary - for employees
- ATO Guide - for employers
- FBT legislation - the Fringe Benefits Tax Assessment Act 1986
Contact
Kristian Thoroughgood: Taxation Accountant, ext 21922