Fringe benefit tax (FBT): Calculating fringe benefit tax

Short form alternate rate (formerly multi-rate) calculations

Note
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:

1. in column 1 on separate lines enter attributed benefits and non-attributed benefits
2. in column 9 enter the total amount of benefits that were attributed or non-attributed
3. in column 10 enter the rate that you are using to calculate FBT payable

4.  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%

4. 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.

Example

Acme Industries elects to calculate FBT using the short form alternate rate option in 2009-2010. The company undertakes the following calculations.  FBT assessed in quarters 1 to 3 Total attributed benefits $8,295 (FBT rate 61.29%) Total non-attributed benefits $850 (FBT rate 49%) FBT assessed in quarters 1 to 3 $3,637.27 None of the attributed benefits were provided to major shareholder-employees.  FBT payable in the final quarter FBT on attributed and non-attributed benefits $5,500.51 Less FBT assessed on quarters 1 to 3 $3,637.27 FBT payable in final quarter $1, 863.24

 

 

Date published: 29 Sep 2010

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