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Fringe benefit tax (FBT)
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Fringe benefit tax (FBT)

Fringe benefit tax (FBT): Fringe benefit tax overview

FBT glossary

Associated person

Someone associated with the employer or employee by blood, marriage, business partnership, or shareholding interest.

Attributed benefit

A fringe benefit that an employee has the principal use or enjoyment of during the year. Certain rules and thresholds apply.

Cash remuneration

The employee's gross salary or wages, bonuses, overtime and other taxable income from all sources associated with the company (including subsidiaries) during the year, less tax payable.

For a major shareholder-employee, cash remuneration also includes any interest or dividends received from the employer, or a related employer who pays cash remuneration.

Close company

A company that has five or fewer natural person shareholders.


A formal and legal entity in its own right, separate from its shareholders (or owners). It is formed when a group of people exchange money and/or property for shares in an enterprise registered under the Companies Act 1993.

Fringe benefit

A non-cash benefit provided to an employee or an associated person. Most benefits given to employees other than their salary or wages are fringe benefits.

Fringe benefit-inclusive cash remuneration (FBICR)

The taxable value of attributed fringe benefits plus the net cash remuneration.

If you're using the multi-rate calculation process, calculate FBICR for each employee who has fringe benefits attributed to them.

Fringe benefit tax

A tax on benefits that employees (past, present or future) receive and enjoy as a result of their employment. It includes benefits given to employees or shareholder-employees through someone other than the employer.

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Major shareholder-employee

A person who owns, controls or has the right to acquire 10% or more of the ordinary shares, voting rights or control of a close company, and is also an employee of that company.

On premises exemption

The "on premises" exemption has been extended to include premises of other companies in the same group when there is 66% or greater common ownership with the employer company.


This is where two or more people run a business together, and each partner contributes something to the business and, in return, each partner shares in any profit or loss. Each partner is also liable for any debt within the partnership.


A shareholder and employee of a company that has no more than 25 shareholders. Any benefit that a shareholder-employee receives as an employee is a fringe benefit and FBT is payable.

Sole trader

A person trading on their own. This person controls, manages and owns the business.


The value in a fringe benefit category that determines when the benefit must be attributed to the employee.