Fringe benefits are an important part of business and can be a useful way to attract quality staff. If you're going to provide fringe benefits to your staff, make sure you understand your taxation obligations. Find out how FBT could affect your business, and how to register for FBT.
FBT is a tax that employers pay on benefits paid to an employee (or their associate, such as a family member) in addition to their salary or wages. FBT is calculated on the taxable value of the benefits you provide. This is separate to income tax.
If you provide fringe benefits to your employees, the Australian Taxation Office (ATO) recommends you register for FBT.
Check the ATO website for more information on fringe benefits tax.
Register for FBT online through the Business Registration Service. You can use the same form to register for other taxes at the same time.
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:
It's entirely legal to provide fringe benefits, but you must meet your FBT obligations.
If your business provides fringe benefits to your employees then you need to:
It's important to consider any FBT implications if you’re hosting a work event. Some Christmas parties for example can attract FBT. Consider:
Generally, you won't pay FBT if you host a Christmas party for your current employees on your business premises on a work day and provide food and drink only, or keep the cost of the party below $300 per employee and certain conditions are met.
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