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Fringe Benefits Tax Hints and Tips

Fringe Benefits Tax Hints and Tips. March 2011. What is Fringe Benefits Tax. A tax payable by employers on Benefits Provided by employers (or a third parties under an arrangement) To employees (or associate of employees) In respect of employment Rate = 46.5%

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Fringe Benefits Tax Hints and Tips

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  1. Fringe Benefits Tax Hints and Tips March 2011

  2. What is Fringe Benefits Tax • A tax payable by employers on • Benefits • Provided by employers (or a third parties under an arrangement) • To employees (or associate of employees) • In respect of employment • Rate = 46.5% • Calculated: benefit value x gross up x 46.5% 1.8692 (no GST) 2.0647 (GST)

  3. How does FBT impact • Budget areas • FBT expense is charged either automatically (through 558x codes or by journal after FBT return is completed) • Individuals • the value of certain fringe benefits (where total is > $2,000) must be reported on payment summaries (note grossed up taxable value is reported ie. value x 1.8692) • This impacts on income tested benefits and some govt levies and charges (eg. Medicare levy surcharge, HELP (HECS) repayments etc).

  4. Cars • Exempt cars • If private kms are recorded we need a logbook! • If available for private use be sure to list a driver.

  5. Expense • Dates must be within FBT year (1 April 2010 – 31 March 2011) • Otherwise Deductible benefits • Declarations • Minor and infrequent benefits

  6. Accommodation/Housing • Living Away From Home: • “required to live away from their normal place of residence in order to perform employment related duties” • But for the work duties they would be living in their normal residence • Temporary arrangement • Declaration/supporting paperwork

  7. Property • Examples: farewell gifts, computer equipment, staff awards, uniforms (except registered uniforms, protective clothing and compulsory uniforms) • Declarations • Minor and infrequent benefits

  8. Equipment on loan • Declarations

  9. Loan/Debt Waiver • Salary overpayments • Repayment schedules

  10. Travel • Travel calculator • Travel diaries

  11. Residual • Third Party benefits

  12. 11A/11B transactions • 11A (need to include in FBT Pack) • 11B – check and make corrections

  13. General hints and tips • Reasonableness check • Compare to last year • Check accounts where benefits could be ‘hiding’… eg: • 5665: Medals, Medallions and Prizes • 5673: Staff Development expenses • 5890: Misc Op Expenses

  14. Key dates • Packs due in 15/4/2011

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