Full alternate rate calculations for tax years 1 April 2021 to 31 March 2024

You can complete full alternate rate calculations for tax years before 1 April 2024 in myIR for attributed and non-attributed benefits or manually calculate the FBT payable. 

To manually calculate full alternate rate calculations for tax years before 1 April 2024, follow the steps below.

Attributed benefits

For each employee with attributed benefits, you’ll need the following:

• employee name (tick for major shareholder-employees)
• employee’s income (an example of this is salary or wages).

1 Tax on income

Calculate tax on the employee’s income using income thresholds and tax rates in table 1. Tax on income is on the whole dollar (no cents).

2 Net income

Subtract the tax calculated in step 1 from the employee’s income (both are in dollars and cents).

3 Total fringe benefits

Add up the total fringe benefits attributed to the employee. For quarterly returns, the total benefits provided in quarters 1 to 4. For annual and income year returns, the benefits provided in the tax or income year. 

4 Total remuneration (fringe benefit-inclusive cash remuneration)

Add the total fringe benefits from step 3 to employee’s net income at step 2.

5 Tax on total remuneration

Calculate the tax using the total remuneration thresholds and rates in table 2. Tax on remuneration is calculated on whole dollars.

6 FBT payable for the year

Subtract employee’s tax on income at step 1 from tax on total remuneration at step 5 to work out the FBT payable for the year. 

The tax on net income step for tax years from 1 April 2024 is not required for earlier tax years.

Non-attributed benefits

Calculate FBT payable on non-attributed (pooled) benefits. Multiply the non-attributed benefits by the rate that applies:

• 63.93% for major shareholders
• 49.25% for all other employees.

Total fringe benefits tax

Add FBT payable for attributed and non-attributed benefits together.

Quarterly returns only

Subtract the fringe benefit tax assessed in quarters 1 to 3 to get the total fringe benefit tax to pay in quarter 4. Transfer this amount to box 6 of the quarter 4 Fringe benefit tax quarterly return - IR420.

Income year and annual returns

If you file income year (Fringe benefit shareholder/employee income year tax return - IR421) or annual returns (Fringe benefit ordinary employee annual tax return - IR422), transfer the FBT payable on the total attributed and non-attributed benefits to box 5.

GST

Work out the GST (box 6 for income year and annual returns or box 7 for quarterly returns) on the fringe benefit value.

Tax to pay

Add the GST to the FBT to pay - this is the total amount of tax to pay.