Here are some examples of when fringe benefit tax applies to unclassified fringe benefits.
Andrea, Jill and Anna were each given a necklace by their employer as a Christmas present during the quarter ended 31 December 2016. The necklaces cost the employer $160, $170 and $380 (GST inclusive). The employees weren’t given any other UFB benefits during that quarter and the total UFB provided in the previous three and current quarters totalled $9,500 (GST inclusive).
The total UFB for the current quarter and the three previous quarters doesn’t exceed $22,500. Because the $160 and $170 benefits don’t exceed the individual employee $300 they’re exempt as taxable benefits. However as the $380 benefit exceeds $300 this amount is liable for FBT.
John, Shane and Nancy were each given either a turkey or a ham Christmas bonus by their employer during the quarter ended 31 December 2016. A turkey or ham cost the employer between $60 and $120 GST inclusive. These particular employees weren’t given any other UFB during that quarter and the total UFB provided in the current and previous three quarters totalled $31,500 (GST inclusive).
The total UFB for the current quarter and the three previous quarters exceeded $22,500, therefore all UFB for the quarter ended 31 December 2016 are subject to FBT.
Frank owns a retail sporting goods store and is an employer. As a Christmas bonus in December 2016, an employee bought sporting goods at 50% of the cost price of $5,000 (GST inclusive). The taxable value of the fringe benefit is $2,500. FBT returns are filed on an annual basis and the total UFB for 12 months ending on 31/03/2016 didn’t exceed $22,500.
However as the value of the fringe benefit ($2,500) is greater than $1,200, there will be a FBT liability.