Westcourt

Fringe benefits tax

Many families in business typically see Fringe Benefits Tax as a “bad” thing. However, a creative tax strategy to your employment can help a business use fringe benefits tax to engage and motivate staff members.  Alternatively, the good use of systems and technology can streamline repetitive tasks and free up the internal finance team to do more profitable work rather than completing fringe benefits tax returns.

In essence, a fringe benefits tax is an employment tax. And our fringe benefits tax calculators are essential in understanding how the cost of fringe benefits tax impacts an employee’s remuneration package when modelling your HR and employment cost.

At Westcourt, we freely make available FBT calculators to assist our clients in making a cost-benefit approach to fringe benefits tax.

Importantly we understand that fringe benefits tax should be viewed as a total tax cost by looking at payroll tax, workers compensation insurance costs, super guarantee levy and the administrative costs of Single Touch Payroll. And we cast our mind to see how fringe benefits tax applies to:

  1. Motor vehicle fringe benefits;   
  2. Car parking fringe benefits (and the small business exemption applicable);    
  3. Entertainment fringe benefits;    
  4. Debt waiver fringe benefits;    
  5. Loan fringe benefits;    
  6. Housing fringe benefits (noting the FIFO exemption for remote workers);   
  7. Board fringe benefits;    
  8. Property fringe benefits;    
  9. Living away from Home Allowances;    
  10. Expense payment fringe benefits;    
  11. Car leasing fringe benefits; and   
  12. Residual fringe benefits.   

And while the above list can appear daunting, it is worth noting that there is a range of exemptions and benefits that can also help.  This includes the exemption for work-related items, retaining staff, emergency assistance, remote worker accommodation, minor benefits and safety payments.   

It is our deep expertise and single focus on emerging + middle market family businesses that gives us an edge in identify fringe benefits tax exemptions and technology to streamline systems that allows us to create true value and applying exemptions properly.

Further, avoiding fringe benefits tax can be appealing, but not all benefits can be avoided. So clear fringe benefits tax governance, systems, elections and records are needed to ensure that your private business can safely and adequately comply with the FBT regulations, including payroll tax, STP reporting, BAS preparation, and superannuation guarantee legislation.

In some instances, like employee share plans, the use and integration of fringe benefits tax law to the share plan can create an unusual outcome with no fringe benefits tax and no income tax to the employee. 

Why should I engage Westcourt for FBT advice? 

  1. Westcourt offers complimentary FBT calculators for decisions like a novated lease.   
  2. Westcourt has dedicated FBT specialists who champion FBT strategy and compliance.   
  3. Westcourt understands family employment dynamics within a private business and can leverage FBT law to family employment arrangements.   
  4. Westcourt uses the technology of Business Fitness and CCH IKnow for handy templates and checklists for your internal team to manage, control and understand your FBT obligations.   
  5. Westcourt is part of the GGI Global Alliance Network, which gives us access to local, on the ground employment tax advice for offshore employees.   
  6. Westcourt has a senior tax leadership role within the profession for taxes, including FBT, that can be leveraged into FBT solutions for your business. 

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