Fringe Benefits Tax (FBT) is the tax that employer’s pay on benefits they provide to their employees, or their employee’s associates (such as family members), in addition to their wage.
These benefits can include anything from company cars to meals, gym memberships and entertainment expenses. Understanding your Fringe Benefits Tax obligation is important to ensure your business is compliant with the Australian Taxation Office’s requirements. This article walks you through important dates, why record keeping matters, what records you need to keep track of and what you need to do to lodge your FBT return.
Important FBT Dates to Remember
- 1 April – 31 March – FBT year
- 31 March 2025 – Cut-off date for the 2024 – 25 period.
- 21 May 2025 – Due date for lodging your FBT return and making your payment (unless you lodge through a tax agent, in which case different dates may apply).
- Quarterly BAS Payments – If you’re required to pay FBT by instalments, these are included in your activity statements throughout the year.
The Importance of Record Keeping
Record-keeping is vital to accurately calculate the taxable value of fringe benefits and to support any concessions claimed. The Australian Taxation Office (ATO) mandates that employers keep records for five years from the date of lodging their FBT return. If a return isn’t lodged, records should be kept for five years from the due date.
Employees include:
- Current, future or past employees
- Director of a company
- Beneficiary of a trust who works in the company
Records You Need
- Calculations and Worksheets
- Employee Declarations
- Invoices and Receipts
- Lease Agreements
- Travel records and Odometer Readings
Entertainment-Related Benefits
For benefits related to entertainment (e.g., meals and events):
- Date of Entertainment: When the event occurred.
- Recipients: Identities of those who received the benefit (employee, associate, or others).
- Cost: Total expense incurred.
- Type of Entertainment: Nature of the event or activity.
- Location: Where the entertainment was provided.
What employers need to do
As an employer, you’re responsible for managing your FBT obligations. Here’s what you need to do:
- Identify the fringe benefits you provide – Determine which benefits fall under FBT, such as cars, entertainment, or expense reimbursements.
- Check for concessions and exemptions – Some benefits, like work-related items, may be exempt from FBT.
- Calculate the taxable value of benefits – Work out how much FBT applies based on the type of benefit using the ATO’s calculators.
- Assess eligibility for exemptions or rebates – Not-for-profit employers may qualify for FBT exemptions or rebates, reducing overall tax liability.
- Maintain accurate records – Keep track of benefits provided, employee declarations, receipts, logbooks, and any documentation supporting exemptions.
- Lodge your FBT return and make payments – Ensure timely lodgment and payment to avoid penalties.
- Report fringe benefits in employee payment summaries – If required, report fringe benefits on employees’ end-of-year payment summaries.
What employers need to do
By maintaining accurate and detailed records, businesses can ensure compliance, support their FBT positions, and be well-prepared in the event of an ATO review.
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