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FBT – why all business owners need to report in May Posted on April 22, 2021
Fringe Benefits Tax (FBT) is often a grey area of tax for businesses, albeit quite black and white for the ATO. It is not an optional payment or reporting responsibility. All businesses with employees are required to review and report Fringe Benefits paid up to 31 March to the ATO by 15 May. It is a bread-and-butter business tax obligation and the risk of doing nothing will leave businesses exposed in an audit.
So, what is it exactly? FBT is a payment to a current or former employee, or an associate or a relative of an employee, that is different to salary and wages.
Fringe Benefits include big things, such as a car, accommodation and/or housing, parking, travel, discounted loans, gym membership, school fees, and salary sacrifice arrangements.
It can include smaller things such as food, drink, entertainment and recreation.
The FBT rate for 2018 through to 2022 is 47% on the cost of the payment.
FBT has its own ‘year’. The reporting period is 1 April to 31 March. The reporting deadline is 15 May.
Fringe benefits with a total value of more than $2000 need to be reported. We’ve found that many businesses haven’t realised when they’ve provided a Fringe Benefit, so reporting nonetheless is worthwhile.
FBT concessions apply to Not-for-Profits with certain criteria. Here is some information for NFPs regarding FBT exemptions.
All business owners need to care about getting FBT right. Engaging an accountant to help dot the ‘i’s and cross the ‘t’s is a recommended way to stay on the right side of FBT and an ATO auditor.