A fringe benefit is a ‘payment’ to an employee, but in a different form to salary or wages. According to the FBT legislation, a fringe benefit is a benefit provided in respect of employment. This effectively means a benefit is provided to somebody because they are an employee.
These rates and thresholds apply for the FBT year starting from 1 April 2024 to 30 March 2025.
- FBT Rate: 47%
- Instalments Threshold: Quarterly instalments are required if last year’s FBT liability was $3,000 or more.
- Higher Gross-Up Rate: 2.0802 (when GST credit is allowed for the benefit provided).
- Lower Gross-Up Rate: 1.8868 (when GST credit is not allowed for the benefit).
- Reportable Fringe Benefits Thresholds:
- Taxable value must exceed $2,000.
- Minimum grossed-up value is $3,773.
Here are some examples of FBT expenses:
- Car expenses: This includes costs like registration and insurance.
- Car parking: Applicable if the employer does not provide the parking facilities.
- Home mortgage: Reimbursements or payments towards an employee’s home mortgage.
- Home/desktop computer: Costs related to acquiring computers for home use.
- Home telephone and internet: Payments for an employee’s home telecommunication services.
- Employee personal credit card payments: Reimbursements for expenses charged to an employee’s personal credit card.
- Health insurance premiums: Payments towards an employee’s health insurance.
- Self-education expenses: Costs associated with an employee’s education that is relevant to their job.
If you are wanting further information about Fringe Benefit’s Tax Rates 2024-2025, you can contact us here.