Fringe benefit tax (FBT): Calculating fringe benefit tax
|From 1 October 2010 personal tax rates have changed, so the higher FBT rates of 61% and 61.29% have reduced to 49.25%. The following information is using the rates from 1 October 2010 onwards. If you are calculating your FBT requirements for periods prior to 1 October 2010, you will need to use the previous rates.|
Complete this calculation in your annual or income year return. Or, if you file on a quarterly basis, in the fourth or final quarter return (quarters 1 to 3 should be calculated using the single rate option of either 49.25% or 43%).
Classifying the benefits
Under this option you must still classify benefits as either:
- attributed - all of these benefits are subject to the single rate of 49.25%, or
- non-attributed - all of these benefits are subject to the single rate of 42.86% (or 49.25% if provided to major shareholder-employees).
Where non-attributed benefits are provided to shareholder-employees, two pools for non-attributed benefits may be necessary. This option may appeal to employers providing attributed and non-attributable benefits mainly to employees who earn more than $70,000 gross equivalent income.
Doing the calculation
To undertake the short form alternate rate calculation process, complete the FBT alternate rate calculation sheet - quarterly returns (IR417) as follows:
- in column 1 on separate lines enter attributed benefits and non-attributed benefits
- in column 9 enter the total amount of benefits that were attributed or non-attributed
- in column 10 enter the rate that you are using to calculate FBT payable
2009-10 short alternate rates Fringe benefit type Tax rate Attributed 61.29% Non-attributed - major shareholder employees 61% Non-attributed - other employees 49%
2010-11 short alternate rates Fringe benefit type Tax rate Attributed 55.04% Non-attributed - major shareholder employees 55.04% Non-attributed - other employees 45.99%
2011-12 short alternate rates Fringe benefit type Tax rate Attributed 49.25% Non-attributed - major shareholder employees 49.25% Non-attributed - other employees 42.86%
- in column 11 multiply column 9 by column 10 and enter the total.
Complete boxes A, B and C where C is the amount of fringe benefit tax to pay. Transfer this amount to your return.
Acme Industries elects to calculate FBT using the short form alternate rate option in 2009-2010. The company undertakes the following calculations.
None of the attributed benefits were provided to major shareholder-employees.
Date published: 29 Sep 2010