Fringe benefit tax on specific categories of benefits

Motor vehicles, low-interest loans, free, subsidised or discounted goods and services, employer contributions to funds, insurance and superannuation schemes and other benefits.

Motor vehicles

As a general rule, as long as you have a vehicle available for an employee to use privately, you will have to pay FBT whether or not your employee actually uses the vehicle privately. But there are certain exemptions from FBT - general and daily.

Low-interest loans

Rules have changed for employers who are, like banks or financial institutions, lending money to members of the public. Those employers can now choose to value low interest loans provided to employees using either the prescribed rate or alternatively a market rate. Certain criteria apply to what constitutes a market rate. For all other employers the value of the loans must continue to be calculated using the prescribed rates issued by Inland Revenue quarterly.

Free, subsidised or discounted goods and services

If goods are provided for an employee at less than the cost to the employer, then this is a fringe benefit. Also if services are provided to an employee at less than the normal cost to the public, this is also a fringe benefit.

Employer contributions to funds, insurance and superannuation schemes

Any contributions you make for your employees to any of the following are subject to FBT. This includes contributions to sick, accident or death benefit funds, insurance fund of a friendly society, life, pension, personal accident or sickness policies and superannuation schemes to which ESCT (formerly SSCWT) does not apply.

Other benefits

There are some other benefits that may also be liable to FBT.

Date published: 14 Oct 2004

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