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Fringe benefit tax on specific categories of benefits: Free, subsidised or discounted goods and services
Unclassified benefit thresholds
The thresholds that apply to unclassified benefits have increased for periods commencing 1 April 2009, as follows:
|Exemption criteria||Up to 31 March 2009||After 1 April 2009|
|Quarterly threshold per employee||$200.00||$300.00|
|Quarterly threshold per employer||$15,000 per annum||$22,500 per annum|
|Annual threshold per employee||$800||$1,200|
|Annual threshold per employer||$15,000 per annum||$22,500 per annum|
Employers who are required to file quarterly returns have more flexibility in terms of providing unclassified benefits and not incurring FBT given that the employer threshold is now expressed on an annual basis. The maximum amount of $22,500.00 applies to the current quarter and the three previous quarters.
An employer has provided the following unclassified fringe benefits in the last three quarters:
$5000 in the September 2005 quarter
$6000 in the December 2005 quarter
$3000 in the March 2006 quarter, a total of $14,000.
In the June 2009 quarter the employer can provide up to $8,500 in unclassified benefits without having FBT applying to that quarter's benefits providing that each employee benefit doesn’t exceed the $300 employee exemption. Assuming that the employer does this, then in the September 2009 quarter, the employer can provide $5,000 in unclassified benefits before FBT applies to those $5,000 of benefits.
An employer has provided employees with the following unclassified fringe benefits in the quarter ended June 2009:
There is no exemption for Chris and Denise as the total value of benefits is over the $300 maximum per quarter. In this example the total exemption is $450.
|It is very important to note what exemptions have been claimed in the previous three quarters when completing the current FBT return.|
General exemption when you file annual or income year returns
If you are an employer filing annual or income year returns, you have:
- an exemption of $1,200 for each employee per year
- a maximum exemption for all employees of $22,500 per year. If you are in a large organisation, check with other sections to make sure this maximum has not already been used up.
Note: If the value of an employee's fringe benefits goes over $1,200 or the total value for all employees goes over $22,500 for a year, the full value of the good and services benefits is subject to fringe benefit tax. You cannot deduct the exemption first.
If the period covered by the return is less or more than a normal income year, make the following adjustment:
Days covered by return - divide by - 365 x $1,200
The exemption does not apply where a fringe benefit arises as a result of an employee receiving any of the following:
- private use of a motor vehicle by an employee
- private use of pool vehicles
- subsidised transport
- employment-related loans
- contributions to superannuation schemes with an exception being present where the contribution is a specified superannuation contribution ans subject to specified superannuation contribution withholding tax
- contributions to life or health insurance