Tax Facts (Basic) - Fringe Benefit Tax
In your business, you might provide your employees with benefits other than their salary or wages. Non-cash benefits provided to employees or associates of employees are fringe benefits. These are subject to Fringe Benefit Tax (FBT).
The four main groups of fringe benefits are:
- Motor vehicles (refer to the Inland Revenue website for more information on how to calculate)
- Low-interest loans other than low-interest loans provided by life insurance companies
- Free, subsidised or discounted goods and services, including subsidised transport for employers in the public transport business
- Employer contributions to sick, accident or death benefit funds, superannuation schemes and specified insurance policies
Gifts, prizes and other goods are fringe benefits. If you pay for your employees' entertainment or club memberships, these benefits may also be liable for fringe benefit tax.
Fringe Benefit Tax is payable quarterly (however some employers may be able to elect payments filing on an annual basis).
Refer to the Inland Revenue website for more information on how fringe benefit tax is applied and calculated.
If you would like further information on whether FBT is payable in your situation and how this is calculated just give us a call.