What is the Fringe benefits tax return (FBT)?

A Fringe Benefits Tax (FBT) Return is a tax report that businesses in Australia must lodge with the Australian Taxation Office (ATO) to declare any fringe benefits provided to employees or their associates during a financial year. The return outlines the value of benefits provided, calculates the FBT liability, and helps businesses fulfill their tax obligations.

Key Aspects of the Fringe Benefits Tax Return:

1. What is Fringe Benefits Tax (FBT)?

FBT is a tax employers pay on certain benefits they provide to their employees or employees' associates (e.g., family members) in addition to their salary or wages.

Fringe benefits are non-cash benefits that are provided in place of, or on top of, salary and wages. These can include:

• Company cars or vehicles for personal use.
• Housing (e.g., rent-free accommodation).
• Entertainment (e.g., meals, tickets to events).
• Loans (e.g., low-interest loans).
• Salary packaging arrangements, where employees receive part of their salary as non-cash benefits.

2. Who Must Lodge an FBT Return?

Employers who provide fringe benefits to their employees must lodge an FBT return. This includes businesses, non-profit organizations, and government agencies.

If the total taxable value of fringe benefits exceeds a certain threshold, an FBT return must be lodged. For most employers, the FBT return is due annually, though some businesses may need to report and pay FBT more frequently if they have a large number of employees or fringe benefits.

3. FBT Rate and Liability:

The FBT rate is typically 47% (as of the 2023–2024 financial year), which applies to the taxable value of the fringe benefits provided.

Employers must calculate the taxable value of each fringe benefit provided (the amount the ATO determines the benefit is worth) and apply the 47% tax rate to that amount.

4. When is the FBT Return Due?

The FBT year runs from 1 April to 31 March.

The FBT return is generally due by 31 May of the year following the end of the FBT year. However, if the employer uses a registered tax agent, the due date may be extended to June 25.

At Y&S Accounting, we specialize in assisting businesses with their Fringe Benefits Tax Return (FBT),. Please feel free to schedule an appointment with us on our website at www.taxbne.com.au/. We look forward to providing you with the support you need.