6 Things that you should know about Fringe Benefits Tax (FBT)

1. 6 Things that you should know about Fringe Benefits Tax (FBT) FBT is a type of payment paid by employers to their employees. However, it is significantly different from wages or salaried paid to the staffs of an organization. It includes employees’ family members and applies even a third party gives the benefits under a contract with an employer. Fringe benefits tax doesn’t relate to income tax, but its calculation is done the amount of FBT. As an employer, you need to do self-assessment of your FBT liability for an FBT year and lodge a return for it. You can claim for a deduction in your income tax for offering fringe benefits to your employees.

2. FBT Registration Typically, you have employees at different levels in your organisation. For their betterment, you produce cars, parking expenses, employee deduction, entertainment, and private expenses. If you are doing these all for your staffs, including seniors (directors), you are eligible for FBT. You should collect all the associated details by logging onto the ATO website or consulting experienced accountants as soon as possible. With the support of your accounting professionals, you can carry out the entire process and get yourself registered for an FBT. Exemptions of Fringe Benefits Tax You don’t need to get worried about an FBT if you provide Smartphone, laptops, tablets, protective clothing, portable prints, and allied others below the value of $300. The exemption applies to you when your offered benefits are in minor or infrequent category. Management of your vehicle log books If you are an employer with more than 20 employees or tools of trade, you need to have a car for a sales-based travel. The Australian Taxation Office has a unique process to validate companies for the percentage of the car use. And this method is known as simplified method. Terms & conditions are as follows: •Valid log books can contain 75% of the car •The employer has the right to choose the make and model of the car before giving to an employee •The price of the fleet of cars should in the fixed range as per the ATO •No offering of the car under salary package arrangement Safe Harbour provisions for workhorse cars

3. The ATO has published safe harbour guidelines for company employees. As per the guidelines, the vehicle should be in accordance with the definition of workhorse vehicles and the private use of that vehicle should be as per the conditions mentioned. Lodge of an FBT Return when No FBT is payable There is a need to file an FBT return even if you have no FBT to pay. Many experienced accountants say that lodge on an FBT return helps you reduce an audit from the ATO up to 3 years. Going through the ATO website or interacting with a provider of company tax return can help you know more in this regard. How to reduce your fringe benefits tax There are many ways to minimise your FBT liability. Here are some of them: •Use cash salary instead of fringe benefits •Produce the benefits that can help your employees to claim for an income tax deduction if they had to make payments for benefits •Give the benefits that are exempted from an FBT return •Utilize the contribution of your employees Conclusion Fringe Benefits Tax is a different benefit paid by an employer to assist in optimising company business process, especially sales. It has included every point of FBT that you should be aware of. Your accounting professionals can help you more in this regard. Discuss the professional who is responsible for filing your company tax return to the ATO on an FBT return and what you should do.