Fringe Benefits Tax
If you provide non-cash benefits to your employees or even to yourself when you operate a company, chances are you will be liable for FBT and required to lodge a return each and every year.
The FBT year runs a little differently to the normal Financial year. It Starts on the 1st of April and Ends 31st March the following year.
What exactly is Fringe Benefit tax?
You, like many Australians whether an employee or an employer, might offer something other than money as part of a salary package. Some of the more common ones, a car and a phone. What does this have to do with your tax? As much as we like to think that a car or phone given to us will be all used for work, chances are that isn't really 100% correct. That is how the ATO view it anyway. This is why we are told to keep things like a log book for motor vehicles to prove just how much we use these benefits for work purposes.
How does this affect me?
As an employee, if the private portion is over a certain threshold, which is found out when your employer lodges an FBT return, this will be placed on your yearly PAYG summary as a 'Reportable Fringe Benefit'. It has no bearing on your tax liability but it does affect things like Family Tax, Medicare Surcharge and your private health rebate. So even though your PAYG summary may say $90,000, if it also includes $20,000 reportable FBT, your actual income for working out certain benefits as described above, is actually $110,000.
What should I do now?
If you are an employee, nothing. If you are an employer and believe you might be providing a Fringe Benefit, talk to your Accountant and see what you need to do to make sure the ATO do not come knocking at your door.