Fringe Benefits are defined as benefits received as the result of an employment relationship that do not take the usual form of salary, wages or cash remuneration.
Common examples include the provision of cars for private use, low interest loans, payment of expenses and superannuation.
The FBT regime is designed to ensure that taxpayers still pay their “fair-share” of tax on these amounts, as they constitute reward for effort but are not taxed under the Pay As You Go Withholding (PAYGW) rules.
From 1st April 2015, the rate of FBT increased to 49% – this has the impact of adjusting the “gross up rate” as well as the amount employees of eligible employers (such as public Benevolent Institutions and Non-profit organisations), may be able to salary sacrifice so they do not exceed the FBT concessional cap amounts for the FBT year.
If you have entered into a salary sacrifice arrangement with your employer – now is an opportune time to review the details of the arrangement to ensure you are receiving the most benefit. Your accountant or salary packaging provider will also be able to help.