The fringe benefits tax (FBT) year ends this week on 31 March 2023.
Employers must assess their fringe benefits tax (FBT) liability for the 2023 FBT year (1 April 2022 to 31 March 2023) to determine whether they have a lodgement and payment obligation.
If the employer:
- has an FBT liability for the 2023 FBT year, they must lodge an FBT return and pay their liability by 22 May. This date applies, as the statutory due date of 21 May falls on a weekend this year, so the due date is moved to the next business day.
- does not have an FBT liability for the 2023 FBT year, and they are registered with the ATO as an FBT payer, they should complete a Notice of non-lodgement – Fringe benefits tax form by 22 May if a return would’ve otherwise been due.
For more information on Notice of non-lodgement visit: Fringe benefits tax – Notice of non-lodgment
What is FBT?
Fringe benefits tax (FBT) is a form of tax employers pay on certain benefits they provide to employees, including their families or associates.
It is separate from income tax and is calculated on the grossed-up taxable value of the fringe benefit. This amount is then multiplied by the FBT rate.
There are different types of fringe benefits that you can provide to your employee. Some common examples include:
- allowing an employee to use a company car for private purposes
- reimbursing an employee for school fees
- car parking fringe benefits
- entertainment-related fringe benefits.
More information can be found at the following:
Get ready for fringe benefits tax time – 2023
Types of fringe benefits – ATO
Amounts reported on income statements or payment summaries:
If you provide an employee certain fringe benefits exceeding $2,000 in an FBT year, you must report the grossed-up taxable value of those benefits, known as reportable fringe benefits, on their income statement through STP for the relevant financial year.
The reportable fringe benefits amount (RFBA) for an income year (1 July to 30 June) is shown on either:
- an income statement through ATO online services in myGov
- or a payment summary.
This means the reportable fringe benefits amount on an income statement or payment summary for the year ending 30 June 2023 will be the grossed-up taxable value of the reportable benefits provided from 1 April 2022 to 31 March 2023.
Calculating reportable fringe benefits amount
To calculate the RFBA, multiply the taxable value of the fringe benefits (that are reportable) using the lower gross-up rate. The lower gross-up rate for the FBT year ending 31 March 2023 is 1.8868.
Note: you do not use the higher (type 1) gross-up rate to calculate the RFBA. This is the case even if you use the higher rate to calculate the amount of FBT to pay on the fringe benefit.
For example, if the taxable value of your fringe benefits is $2,000.01, your reportable fringe benefit amount is calculated as $2,000.01 × 1.8868 = $3,773.
Keep the right records
Keep all records relating to the benefits you’ve provided, including:
- how you calculated the taxable value of benefits
exemptions or concessions that you’re eligible for to reduce your FBT liability.