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Fringe benefit tax on specific categories of benefits: Other benefits

FBT - liability for private telecommunications use

As an employer, you may be paying for a telephone, fax and/or internet connection in an employee's home, or for the employee's cellphone or pager.

You are liable for fringe benefit tax on the employee's private usage of these telecommunications if:

  • the account is in your name as the employer and
  • you pay the whole account.

However, if the account is in the employee's name and you reimburse the full cost, the employee's private usage is subject to PAYE.

Requirements for record keeping

Where payments for an employee's use of telecommunications are subject to fringe benefit tax, your records for these benefits should include:

  • the date of the transaction
  • the name of the employee receiving the benefit
  • a description of the benefit provided
  • the cost to the employee
  • the cost to the employer.

The Fringe benefit tax guide (IR409) gives more information on the records you should keep.