Employers are reminded that if they provided additional benefits to their employees during the FBT year in response to COVID-19 – such as paying for items that allowed them to work from home or COVID-19 vaccination incentives and rewards, that FBT may apply.
For example, if they make a car available to your employees for private use, they may be providing a car fringe benefit. There are a number of resources available on the ATO website to help including a car fringe benefit video series and webinar sessions.
If employees’ expenses were covered during the FBT year, the ATO also has a webinar available to help work out whether employers provide an expense payment fringe benefit.
ATO urges all businesses and their advisers to consider the exemptions and concessions for which they may be eligible that can help reduce the amount of FBT paid.
In relation to COVID-19 protocols, employers may provide employees with benefits they do not usually provide because of COVID-19. This includes paying for items that allow employees to work from home.
Fringe benefits tax may apply if employees are provided benefits in addition to salary and wages. However, exemptions and concessions are available, which can reduce (or eliminate) the amount of FBT paid.
Car fringe benefits
Employers may be providing a car fringe benefit if they make available a car they own or lease to an employee for their private use.
For fringe benefits tax (FBT) purposes, a car is any of the following:
- A sedan or station wagon
- Any other goods-carrying vehicle with a carrying capacity of less than one tonne, such as a panel van or utility (including four-wheel drive vehicles)
- Any other passenger-carrying vehicle designed to carry fewer than nine passengers.
If the vehicle is not a car, and the employee has private use of it, the employer may be providing a residual fringe benefit rather than a car fringe benefit.
The ATO has just released virtual introductory sessions to help employers work out whether they are providing a car fringe benefit.
It has also developed a video series to help employers calculate their car fringe benefits and report them on their FBT return.
Expense payment fringe benefits
Expense payment fringe benefits may arise when an employee incurs an expense and the employer either reimburses them for the expense, or directly pays a third party for the expense.
The expense needs to be incurred by the employee and can be a business or private expense, or a combination of both.
Expense payment fringe benefits may also arise when expense payment benefits are provided to an associate of the employee. An “associate” includes their:
- Parent
- Grandparent
- Brother or sister
- Spouse
- Uncle or aunt
- Nephew or niece
A virtual introductory session has been released by the ATO to help employers work out whether they are providing an expense payment fringe benefit.
FBT exemptions and concessions
Some benefits are exempt from fringe benefits tax (FBT) or receive concessional treatment (for example, living-away-from-home allowances). Specific exemptions and concessions apply to some not-for-profit organisations.
