Providing multi-faceted employment packages to employees (a mixture of cash and non-cash benefits) can give an employer the edge when it comes to staff recruitment and retention. However, the attractiveness of such a strategy is diminished if the non-cash benefits provided attract Fringe Benefits Tax (FBT).
With the FBT rate now sitting at 49%, the employer may be left with a significant tax liability. To ensure this is not the case you may wish to tailor the benefits that you provide to employees by only providing benefits/items that are FBT exempt such as:
- Work-related items including:
- Tools of trade (e.g. hammer, saw or any other instrument held in the hand for manual operation)
- Phones (I-phones, smartphones etc.)
- Portable electronic devices such as personal digital assistants (PDAs), electronic diaries, laptops, notebook computers etc.).
- Salary sacrificed superannuation
- Minor benefits (generally, an item that has a value of less than $300 and is provided infrequently such as a bottle of wine, movie tickets, gym membership)
- Taxi travel (a single trip that begins or ends at work)
- Property benefits (such as food and drink consumed by employee’s on work premises)
- Relocation expenses (where an employee must relocate for work purposes)
- Car-parking in certain circumstances.
Talk to us if you are unsure of whether a non-cash benefit you provide to your employees is FBT exempt. By only offering exempt benefits, you can go on providing multi-faceted employment packages, and avoid the 49% FBT impost.
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