Eg if an employee paid the rent out of their take-home pay or the employee paid the rent for them and the employer then paid the FBT. There are many questions that arise from this, so please get your own advice and if you want to learn more consider our FBT and Salary Packaging course. As a general rule, the cost incurred in providing a fringe benefit is an allowable income tax deduction and.
An employee contribution is assessable income of the employer however, it is not an allowable deduction for the employee. A fringe benefit is exempt income in the hands of the recipient. If you are looking to re-skill or up-skill but unsure of which course best suits you, get in touch with one of our consultants today and we will endeavor to help you. We make a sincere effort to ensure the accuracy of the material described herein; however, Applied Education makes no warranty, express or implied, with respect to the quality, correctness, currentness, accuracy, or freedom from error of this document or the products it describes.
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Why offer fringe benefits? To get the best workers for your business, you may want to attract them with certain benefits. For example, you may give employees fringe benefits like: a car for private purposes goods at a discount low interest loans reimbursement for private expenses, such as school fees It's entirely legal to provide fringe benefits, but you must meet your FBT obligations. What you need to do if you provide fringe benefits.
If your business provides fringe benefits to your employees then you need to: register for FBT calculate how much FBT you have to pay keep all records relating to the benefits you provide, including how you calculated the FBT you have to pay lodge a return and pay FBT to the ATO generally by 21 May include reportable fringe benefits on your employees' payment summary or Single Touch Payroll STP income statement.
If you're providing special perks to your employees, like gym memberships or work vehicles for personal use, you're likely to be liable for fringe benefit tax FBT. Test your knowledge on employee allowances and fringe benefit tax. Jim has a plumbing business with three employees and two vans. Jim uses one of the vehicles himself, and his second-in-command, Paul, takes the other home each evening and weekend.
When Paul first started, Jim let him use the van for non-work purposes at the weekend. Jim decides this is costing his business too much. These are taxed via ESCT. You pay FBT on the cost of the benefit to the employee, eg the cost of the car for the portion of time it's available for personal use. When you first start giving your employees the benefit, you need to register for FBT with Inland Revenue. You can register online or by calling Inland Revenue. FBT categories external link — Inland Revenue.
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