SHORT NOTE ON FRINGE BENEFIT TAX – AUSTRALIA.

1.                   Expenses Covered. 

(a)    Entertainment Benefits including meal (Food & Drink) but not include entertainment to client , Tea Coffe & Light snacks) and include re-creational activities

(b)    Car benefits in KM and car parking but not include Pool Car, Utility Van

(c)    Expenses Payments eg, Health Insurance, professional membership, personal credit card

(d)    Home Telephone & Internet

(e)    Mobile Phone for personal use

(f)      Laptop & Computer , only one exempt.

(g)   

Subscription to Journals not related to work

(h)    Safety Awards exempt upto $200 per employee

(i)      Long Service Award. Exempt upto some limit calculated under some formula for employees serving more that 15 years.

(j)      Travel other than business.

(k)    Living away from Home Allowance (LAFHA) exclude reasonable accommodation & reasonable food amount, 

(l)      Relocation expenses exclude relocation transport,

(m)  Housing  benefits

(n)    Remote Area benefits\

(o)    Loan

(p)    Debt Waiver

(q)    Rented & leased cars

(r)      Tax paid by employer.

(s)    Seminar, but not include which goes for less that 4 hours, CPD,

(t)      Super- Annuation

(u)    Any reimbursements to employees

(v)     Membership to Airport Lounge

(w)   Gifts

(x)    In-House benefits

(y)    Residual benefits

2.                   There are two types of catogary. One on which input is available and other on not and both have separate  factor rate.  The gross up factors are 2,0647 and 1.8692 and the tax rate is 46.5%. 

3.                   Check list for employees

· Do your employees take cars home and garage them overnight, even if only for security reasons?

· Do your employees use cars or other vehicles the business owns for private use?

· Have you paid or reimbursed any employees’ expenses?

· Do you provide entertainment, such as food, drink or recreation to your employees?

· Have you given property, such as electrical goods, to your employees either free or at a discount?

· Do you provide any employees with a house or unit of accommodation?

· Do you provide loans at reduced interest rates to any employees?

· Have you released any employee from a debt they owed the business?

· Do you provide any employees with living-away-from-home allowances?

· Are you a tax-exempt organisation that has provided food, drink or accommodation to employees (UWA is a tax-exempt organisation)?

If you answered YES to any of the above questions, the benefits may attract FBT.

4.                   Payroll Tax

It is important to remember that Payroll Tax (PRT) is also payable when a fringe benefit is

provided to a staff member. PRT is calculated as follows:

Net Taxable Value of Benefit x Type 2 Gross Up Factor x 5.5%

The Type 2 gross up factor is always used when calculating payroll tax. This is calculated by FS-Tax who will notify Human Resources of the payment required to be made to the Office of State Revenue.

5.                   How Do Reportable Fringe Benefits Affect Employees?

Even though a reportable fringe benefits amount is included on your payment summary and is shown on your tax return, it is not included in your assessable income. However, it is included in a number of income tests for:

· Medicare levy surcharge

· Medicare levy surcharge lump sum payment in arrears tax offset

· deductions for personal super contributions

· super co-contribution

· tax offset for contributions to spouse's super

· mature age worker tax offset

· Higher Education Loan Program (HELP) and Financial Supplement repayments

· dependent tax offsets, including:

· dependent spouse

· child-housekeeper

· parent, spouse's parent or invalid relative

· housekeeper tax offset

· senior Australians tax offset

.    pensioner tax offset

· child support obligations

· entitlement to certain income-tested government benefits.