Eligibility for FBT exemption
Your not-for-profit organisation is exempt from fringe benefits tax (FBT), up to a capping threshold, if it is a:
- public benevolent institution (other than a public or not-for-profit hospital) that is registered by the Australian Charities and Not-for-profits Commission and endorsed by the ATO
- health promotion charity that is registered by the Australian Charities and Not-for-profits Commission and endorsed by the ATO
- public or not-for-profit hospital
- public ambulance service.
Public hospitals include government-run hospitals and most not-for-profit privately run hospitals operating for the benefit of the public. Not-for-profit hospitals include those operated by a charity. For more information on the eligibility of hospitals, see FBT guide: 6.3 FBT exemption - subject to capping.
Capping thresholds
Eligible organisations are exempt up to a capping threshold, as follows:
- Public benevolent institutions and health promotion charities: $30,000.
- Hospitals and ambulance services: $17,000.
If the total grossed-up value of fringe benefits you provide to an employee during the FBT year is equal to or less than the capping threshold, the benefits are exempt from FBT. Don't count benefits that would have been exempt even if your organisation was not FBT-exempt, such as minor benefits.
If the total grossed-up value of fringe benefits provided to a specific employee exceeds the capping threshold, your organisation will need to:
- Calculate and pay the FBT on the excess.
- Report details of the fringe benefits provided to all employees, not just for the employee (or employees) that exceeded the exemption cap.
The per employee capping threshold applies even if the employer employed the specific employee for less than the full FBT year. For example, if an eligible public benevolent institution employed someone between October and March and the total grossed-up value of benefits provided was $25,000, FBT is not payable.
If an organisation is both a registered public benevolent institution and a public or not-for-profit hospital, the hospital capping threshold applies.
Benefits not counted in the capping thresholds
The following benefits are not counted in the FBT exemption capping threshold:
- car parking fringe benefits
- meal entertainment benefits (not salary packaged)
- entertainment facility leasing expenses.
Are exempt benefits reportable fringe benefits?
Reportable fringe benefits are fringe benefits that may need to be reported in an employee's income information through Single Touch Payroll, or their payment summary.
Exempt benefits are not reportable fringe benefits unless:
- they relate to eligible electric cars
- they're exempt solely because your organisation is an exempt not-for-profit.
For example, a benefit provided by a public hospital that is an exempt benefit because the hospital is an exempt not-for-profit organisation is still a reportable benefit. In this case, the hospital:
- calculates the notional taxable value of the benefit as though the organisation was not exempt from FBT
- uses this notional taxable value to calculate and report the employee’s reportable fringe benefits amount through Single Touch Payroll.
Although these benefits are reportable, they remain exempt from FBT.
However:
- A benefit that qualifies as an exempt minor benefit (and is therefore exempt for all employers) is not reportable.
- A benefit that is exempt because it is provided by a religious institution to a religious practitioner in recognition of the practitioner's pastoral duties is not reportable.
Calculating your FBT
Use the calculator to work out the FBT payable for the fringe benefits you provide to each of your employees.
To manually calculate your FBT exempt and non-exempt amounts, see FBT guide: 6.10 Calculating the FBT exemption.
Work out if your not-for-profit organisation is entitled to an FBT exemption and check the exemption capping threshold.