FBT Update and Lodgement Reminder

Current as of April 2016

 

As an employer if you have provided Fringe Benefit Tax (FBT)  benefits to your employees (including their associates) this FBT year, you may be required to pay fringe benefits tax.

Example of FBT benefits include a company car, private health insurance cover, holidays, low interest loans, meals and entertainment.

If your business has previously lodged an FBT return with the ATO, your client manager will be contacting you soon to request any relevant information and help you complete this year’s FBT return (for the period from 1 April 2015 to 31 March 2016).

If we are assisting you with lodging your FBT return, the payment is due on 28 May 2016 and lodgement will be on 25 June 2016.

Following is a list of initiatives that you as an employer can implement to reduce your FBT:

  1. Offering exempt benefits to your employees – examples of this include:
    • Providing “minor and infrequent” benefits where the GST inclusive value of each benefit is less than $300.
    • Providing exempt work-related items such as:
      • mobile phones that are primarily for use in the employee’s employment
      • items of protective clothing required for the employee’s employment
      • a briefcase
      • a calculator
      • a tool of trade
      • an item of computer software for use in the employee’s employment
      • an electronic diary or similar item, and
      • laptop or similar portable computer.
  2. Get the employee to share the cost of the FBT benefits by getting them to enter into an “employee contribution” arrangement;
  3. Apply the otherwise deductible rule to the benefits provided where possible.

Documents that you should remember to get your employee to complete before or by 31 March 2016 include:

  • Car odometer declaration/logbook
  • Loan benefit declaration
  • Fuel and oil expenses declaration
  • Living away from home declaration
  • Exempt vehicle declaration (for certain utes and panel vans)
  • Residual non-private use declaration – company car with $Nil FBT

Following is a table that summarises common FBT rates and amounts for this FBT year.

Item 2016 FBT Year
FBT tax rate 49%
Gross-up factor – type 1 2.1463
Gross-up factor – type 2 1.9608
Minor benefit exempt threshold Less than $300
Car parking threshold $8.37
Long Service Award exempt threshold Generally $1,000 (plus extra for each additional yrs. of service)
In-house benefit exempt $1000 per employee
FBT record keeping exemption threshold $8164 in total fringe benefits provided
FBT reportable threshold $2,000 for each employee
Benchmark loan rate 5.65%
FBT-exempt (hospitals) $17,667 grossed–up taxable value per employee
FBT-exempt (PBIs and Charities) $31,177 grossed-up taxable value per employee

If you have any questions or would like to know more about FBT, please do not hesitate to contact us.

 

DISCLAIMER
This newsletter has been produced by Stanley & Williamson as a service to its clients and associates. The information contained in the newsletter is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas contained in this newsletter, it is imperative you seek specific advice relating to your particular circumstances. Liability limited by a scheme approved under Professional Standards legislation.