FBTnews - 2008
Issue 23 August 2008
In this issue of FBTnews we're talking about the new multi-rate fringe benefit rates.
If you have an FBT topic you'd like to see covered in this newsletter, please write to the Editor, FBTnews, PO Box 2198, Wellington 6140 or email us and we'll aim to cover it in a future edition.
New multi-rate fringe benefit rates
In the 2008 budget, changes to personal income tax were announced. These changes were passed into law on 29 May 2008.
The changes include a new bottom rate of 12.5% for FBT and raised thresholds for employers to use when calculating FBT under the multi-rate system.
The multi-rate calculation process means an employee's fringe benefits can be taxed at their marginal tax rate. It ensures that employees earning less than the new income tax threshold of $70,000 are not over-taxed on their fringe benefits.
The 2008-09 FBT return guide will use the following composite FBT multi-rate schedule:
| Income range | Tax rate |
|---|---|
| $0 - $ 8,194 | 0.1594 |
| $8,195 - $11,940 | 0.2012 |
| $11,941 - $30,900 | 0.2658 |
| $30,901 - $32,360 | 0.3699 |
| $32,361 - $45,760 | 0.4925 |
| $45,761 - $52,160 | 0.5625 |
| $52,161 upwards | 0.6393 |
There are further rate and threshold changes for 2009-10, 2010-11 and 2011-12 income years.
Employers still have the option of paying fringe benefit tax of 64% on all fringe benefits rather than applying the multi-rates.
Alan Quinn
Manager
Customer Insight
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Date published: 10 Sep 2008
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