Australian Fringe Benefits Tax

The Australian Fringe Benefits Tax (‘FBT’) year ended on 31st March 2017 and employers who provided fringe benefits to employees in Australia will be required to prepare and lodge their FBT returns to disclose the value of benefits provided to employees during the year 1st April 2016 to 31st March 2017.

Based on recent payroll information, we expect that most Australian payroll customers may have an obligation to prepare and lodge a FBT return in Australia this year.

By way of background, FBT is a tax imposed on employers who provide certain benefits (other than salary and wages) to employees and their associates in connection with their employment. These benefits include but are not limited to:

  • The provision of motor vehicles (either directly or under a novated lease)
  • Reimbursement or payment of personal expenses (including certain salary packaging)
  • Provision of housing or accommodation
  • Meals and entertainment
  • Car parking
  • Living-away-from-home allowances
  • Loans

The taxable value of fringe benefits provided to employees are also required to be disclosed on their annual Pay-As-You-Go (‘PAYG’) payment summary for the year ended 30th June 2017. We note that as FBT is a tax imposed on the employer, it does not affect the employee’s individual income tax liability however it may affect certain income thresholds depending on the
employee’s personal circumstances.

The due date for the lodgement of all FBT returns with the Australian Taxation Office (‘ATO’) together with any accompanying payment is 28th May 2017.

If customers require any assistance with the preparation and lodgement of their 2017 FBT returns we would be happy to provide this service.

Similarly, if any customers have any concerns about the impact of FBT and would like to explore ways of minimising their FBT cost in Australia and/or implement effective salary packaging programs, please don’t hesitate to contact our Global Tax Director Graham McKechnie on graham.mckechnie@activpayroll.com