You are required to pay Fringe Benefits Tax (FBT) if you provide any benefit to an employee or an employees' associate (e.g. a family member, etc).
Benefits include any rights, privileges or services you supply to an employee in relation to their employment. For instance, you are required to pay FBT if you:
- allow an employee to use a work car for private purposes
- give an employee a cheap loan
- reimburse an expense incurred by your employee (e.g. school fees)
- provide entertainment by way of food, drink or recreation.
FBT is separate from income tax and is based on the taxable value of any benefits you provide. You can process your FBT via your monthly or quarterly Business Activity Statement (BAS).
Please note that you are required to pay FBT whether:
- these benefits are provided by you, an associate of yours or a third party under an arrangement with you
- an employee is a current, future or former employee.
Some employers, including charities, may need to work out the status of their workers. Many will be volunteers, however, some will be contractors and employees. Generally, benefits provided to volunteers and contractors do not attract FBT.
You can register for FBT online, by phone, though your registered tax agent or by lodging your annual FTB return.
