As the Australian Fringe Benefits Tax (FBT) year runs from 1 April to 31 March, now is the ideal time for global payroll and mobility professionals to assess the benefits being provided to employees and ensure compliance with FBT obligations.
What Is FBT and Who Pays It?
Fringe Benefits Tax is a tax paid by employers on certain non-salary benefits provided to employees or their associates. These benefits can include:
Importantly, FBT is separate from income tax and is calculated on the grossed-up taxable value of the benefit. Employers - not employees - are responsible for paying FBT, even if the benefit is provided by a third party.
How Much FBT Is Payable?
The FBT rate is 47% of the grossed-up value of the benefit. For GST-inclusive benefits, the gross-up rate is 2.0802. For example, a gym membership costing AUD 1,100 (including GST) results in an FBT liability of approximately AUD 1,075.46.
What Should Employers Be Doing Now?
With half the FBT year behind us, global payroll and mobility teams should:
Deductions and Credits
Employers can claim:
Implications for Global Mobility
For globally mobile employees, benefits provided while on assignment in Australia may trigger FBT obligations. Employers should:
Final Thoughts
With the FBT year-end approaching in March, now is the time to act. A proactive mid-year review helps avoid surprises, ensures compliance, and supports strategic benefit planning for globally mobile workforces.
Australia - Global Insights
For further detailed guidance on payroll, employment law, and compliance in Australia, visit our Australia Global Insights on the activpayroll website.
Next Steps
If you would like to understand how FBT may impact your business or payroll processes, please get in touch. Complete our Contact Us form, and a member of our expert team will be happy to assist with your queries.
