Under the Fringe Benefits Tax Assessment Act 1986, employers are obligated to pay tax on certain benefits they provide to their employees, or to their employees' family or other associates.
FBT is separate to income tax. It is calculated on the taxable value of the fringe benefit. Employers must:
- self-assess
- if they have a liability, they must lodge an FBT return
- pay the FBT they owe.
Employers must also report the benefits through Single Touch Payroll or on an employee's payment summary if the total value of the reportable fringe benefits provided to an employee during the year is more than $2,000.
The reportable fringe benefit amount (RFBA) is:
- not part of an employee's assessable income
- is included in income tests for some government benefits and obligations.