What is Fringe Benefits Tax

When it comes to your business, there are a lot of different taxes that you need to be aware of. One of these is the fringe benefits tax, or FBT. Here's what you need to know about this important tax.

What is FBT?

The fringe benefits tax is a tax that is levied on certain employee benefits. These can include things like company cars, private health insurance, and even home computers. The purpose of this tax is to make sure that employees are not receiving too much in terms of benefits from their employers.

How does FBT work?

The way that FBT works is that it is applied to the value of the benefit that an employee receives. For example, if an employee receives a company car worth $20,000, the FBT on that car would be $2,000. This amount is then added to the employee's taxable income.

What are the rates for FBT?

The rates for FBT vary depending on the type of benefit that is being taxed. For example, the tax rate on a company car is 20%, while the tax rate on private health insurance is 30%.

Is there any way to avoid paying FBT?

There are a few ways that you can avoid paying FBT. One way is to make sure that your benefits are not excessive. Another way is to make sure that your benefits are not provided by your employer - if they are, then you may be able to claim a deduction for them. Finally, you can also make sure that your benefits are exempt from FBT - there are a few benefits that are exempt, such as superannuation and life insurance.

If you have any further questions about FBT, please contact us.