The following worked example shows how to complete a:
- Rebatable employer return
- Public benevolent institution return
- Public hospital return
- Not-for-profit organisation operating partly as an eligible public benevolent institution
Rebatable employer return
You provide the following benefits for the year ending 31 March 2019 to your employees:
- pay Mark, Sam and eight other employees' children’s school fees (an expense payment fringe benefit)
- provide Mark and Sam with cars for private use (a car fringe benefit)
- allow Mark and Sam to purchase restaurant meals on a credit card that is paid by the employer at the end of the month, under a salary packaging arrangement.
The car fringe benefits are type 1 benefits because they are GST taxable supplies with an entitlement to a GST credit.
Mark's car fringe benefit calculated using the statutory formula method (GST taxable supply with an entitlement to a GST credit) is $14,000.
Sam's car fringe benefit calculated using the statutory formula method (GST taxable supply with an entitlement to a GST credit) is $15,000.
Total car fringe benefits = $29,000
Type 1 aggregate amount, which is shown at item 14A on the return is:
- $29,000 × 2.0802 = $60,325.80
The school fees are type 2 benefits because they are GST-free supplies with no GST credit entitlement.
Multiply the expense payment fringe benefits by the number of employees receiving the payment.
$6,000 (expense payment fringe benefit × 10 (number of employees)) = $60,000
Type 2 aggregate amount, which is shown at item 14B on the return, is:
- $60,000 × 1.8868 = $113,208.00
The use of the meal card is a type 2 benefit because it is an input taxed financial supply with no entitlement to a GST credit.
Mark's meal entertainment fringe benefit is $5,500 (ie the amount Mark charged to the credit card for meals).
Sam's meal entertainment fringe benefit is $2,295.
Total meal entertainment fringe benefit = $7,795
Type 2 aggregate amount is:
- $7,795 × 1.8868 = $14,707.60
The total type 2 aggregate amount is therefore:
- $113,208.00 + $14,707.60 = $127,915.60.
You have:
- a fringe benefits taxable amount of $188,240 ($60,325 + $113,208 + $14,707)
- gross tax of $88,472.80 ($188,240 × 47%).
Sam and Mark have an individual grossed-up non-rebatable amount greater than $30,000. Mark has an amount of $50,821.00 and Sam has an amount of $42,523.80. Sam's amount does not include the salary packaged entertainment as the value does not exceed the separate grossed-up cap ($2,295 × 1.8868 = $4,330.20).
The calculation of the aggregate non-rebatable amount is as follows:
- 47% × [($50,821.00 − $30,000 − $5,000) + ($42,523.80 − $30,000)] = $13,322.05
The calculation of the rebate amount is as follows:
- 47% × ($88,472.80 − $13,322.05) = $35,320.85
Completing your FBT return
You would complete your FBT return as follows:
- Item 14A is completed as $29,000 × 2.0802 = $60,325
- Item 14B is completed as ($60,000 + $7,795) × 1.8868 = $67,795 × 1.8868 = $127,915
- Item 14C is left blank
- Item 15 is completed as items 14A + 14B = $60,325 + $127,915 = $188,240
- Item 16 is 47% × $188,240 = $88,472.80
- Item 17 is the aggregate non-rebatable amount = $13,322.05
- Item 18 is 47% of (item 16 − item 17) = 47% × ($88,472.80 − $13,322.05) = $35,320.85
- Item 19 is completed as (item 16 amount − item 18 amount) = ($88,472.80 − $35,320.85) = $53,151.95
- Item 20 is completed as $16,000
- Item 21 is completed as $37,151.95
- Item 22 is left blank
- Item 23 is completed as follows:
Type of benefits provided |
Code |
Number |
Gross taxable value (a) |
Employee contribution (b) |
Value of reductions (c) |
Taxable value of benefits (a) − (b) − (c) |
---|---|---|---|---|---|---|
Cars using the statutory formula |
A |
2 |
29,000 |
0 |
|
29,000 |
Expense payments |
E |
|
60,000 |
0 |
0 |
60,000 |
Income tax exempt body – entertainment |
L |
|
7,795 |
|
|
7,795 |
The other worked examples are:
- Public benevolent institution return
- Public hospital return
- Not-for-profit organisation operating partly as an eligible public benevolent institution
Public benevolent institution return
You are a public benevolent institution that is registered for GST and provide your employees with the following fringe benefits:
- car fringe benefits to Louise and Wendy valued at $2,000 and $25,000 respectively using the statutory formula method (type 1 benefits as you are entitled to GST credits for the provision of these benefits)
- entertainment facility leasing expense benefits to Louise under a salary package arrangement to enable her to hire a room for $5,000 at Fantasy Wedding receptions (type 2 benefit as you are not entitled to a GST credit for the provision of this benefit)
- entertainment facility leasing expense benefits to Wendy by reimbursing her $15,000 for the amount of rent she paid on hiring a houseboat on her holiday (type 2 benefit as you are not entitled to a GST credit for the provision of this benefit).
Louise's grossed-up type 1 amount is:
- car fringe benefit = $4,160.40 ($2,000 × 2.0802).
Louise's grossed-up type 2 amount is:
- salary packaged entertainment facility leasing expense benefit = $9,434.00 ($5,000 × 1.8868).
As the separate cap for salary packaged meal entertainment and entertainment facility leasing expense benefits has been exceeded (the grossed-up salary packaged meal entertainment and entertainment facility leasing expense benefits is $9,434.00), this amount is included in determining whether the capping threshold has been exceeded for benefits you provided to Louise.
Louise's aggregate exempt amount is:
- = $8,594.40 ($4,160.40 + $9,434.00 − $5,000), which is less than the cap of $30,000.
Louise does not have a grossed-up non-exempt amount. You are not liable for FBT on the benefits you provide to Louise.
Wendy's grossed-up type 1 amount is:
- car fringe benefit = $52,005.00 ($25,000 × 2.0802).
As the reimbursement of rent for the houseboat is not provided under a salary packaged arrangement it is not included in determining Wendy's individual grossed-up non-exempt amount. The capping threshold for Wendy has been exceeded and your aggregate non-exempt amount would be:
- $52,005.00 − $30,000 = $22,005.00.
Completing your FBT return
You would complete your FBT return as follows:
- Item 14C is completed as $22,005
- Item 15 is completed as $22,005
- Item 16 is completed as $22,005 × 0.47 = $10,342.35
- Items 17 and 18 are left blank
- Item 18 is left blank
- Item 19 is completed as $10,342.35
- Item 20 is completed as $16,000
- Item 21 is left blank
- Item 22 is completed as $5,657.65
- Item 23 is completed as follows:
Types of benefits provided |
Code |
Number |
Gross taxable value (a) |
Employee contribution (b) |
Value of reductions (c) |
Taxable value of benefits (a) − (b) − (c) |
---|---|---|---|---|---|---|
Cars using the statutory formula |
A |
2 |
27,000 |
0 |
|
27,000 |
Income tax exempt body – entertainment |
L |
|
5,000 |
|
|
5,000 |
The entertainment not provided under a salary sacrifice arrangement does not have to be shown at item 23.
The other worked examples are: