What You Need to Know About 2024 Fringe Benefits Tax

Generally, if you have employees (including Directors) and you provide them with cars, car parking, entertainment (food and drink), employee discounts, loans, or reimburse private expenses, then you are likely to be providing a fringe benefit and we will need to register your business for FBT. There are 13 defined Fringe Benefit categories in the FBT law.

It’s important you start gathering all the details of these provided benefits as soon as possible using our annual FBT Questionnaire and Schedules, so we can calculate any potential FBT liability and lodge your FBT return on time – due 25 June 2024 with payment to be made by 25 June 2024.

Where no FBT is payable there is legally no need to lodge an FBT return, but should you lodge one anyway?

Our strong recommendation to you is yes, you should lodge an FBT Return if you provide benefits to employees, even if no FBT is payable.

This restricts the ATO’s audit window to only 3 years from the date of lodgement. Otherwise, the ATO is entitled to go back an unlimited number of years and audit your business and possibly find areas where they will charge you FBT and penalties.

We have compiled an FBT Factsheet that outlines some of the simple points that the ATO will review if you are selected for audit – How the ATO identifies potential audits. We have also prepared an FBT Factsheet that outlines why an FBT return is a good idea even where no FBT is payable – Why should you lodge a return.

The following items are unlikely to be subject to FBT: mobile phones, laptops, tablets, portable printers, protective clothing, tools of trade etc, or minor and infrequent benefits that are less than $300 in value.

To find out if you are eligible for the minor and infrequent benefit exemption – please ask us to send you our Applying the Minor & Infrequent Benefits Exemptions factsheet.

You can fill out our FBT Questionnaire and Schedules to be 100% sure.

Here are some ways in which you can reduce your FBT liability:

• replace your fringe benefits with cash salary;
• provide benefits that your employees would be entitled to claim as an income tax deduction if they had to pay for the benefits themselves;
• look at providing benefits that are exempt from FBT; and
• use employee contributions, for example, an employee paying for some of the operating costs of car fringe benefit such as fuel that you don’t reimburse them for. You need to be aware that employee contributions will be deemed assessable income to you and subject to GST.

This is an excellent tax planning strategy that you may want to discuss with us. An “Associate Lease” can be used to help improve your employees after tax cash flows, where one spouse earns considerably more than their partner. 

Please let us know if you would like us to send you any or all of the following FBT Factsheets:

• What is a Car Fringe Benefit?
• Employee Business Cars – Tips & Traps 
• Entertaining, Meals & FBT – Tips & Traps
• Using an Associate Lease to boost family income
• Minor and Infrequent Benefits
• How the ATO identifies potential audits
• Why you should lodge a FBT Return
• Workhorse Vehicles and new Safe Harbour provisions

The FBT year ended on 31 March 2024, so be sure to complete and return the attached FBT Questionnaire and Schedules to our office as soon as possible so you don’t miss the lodgement and payment due date of 25 June 2024. 

We will review these documents and then provide you with an upfront price for our services before we begin any work.

We look forward to helping you meet your FBT obligations and are available anytime to answer any questions you have around reducing your FBT liability or creating effective salary sacrifice arrangements.