Fringe benefits tax - a guide for employers
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Chapter 6 - Non-profit organisations and FBT
| Remember, a fringe benefit may be provided by another person on behalf of an employer. It may also be provided to another person on behalf of an employee (for example, a relative). |
If your organisation provides a fringe benefit to its employees or to associates of its employees, your organisation may have a fringe benefits tax (FBT) liability. Depending on your type of organisation, certain benefits you provide to employees receive concessional FBT treatment. As of 3 December 2012, charities that want to access FBT concessions must be registered with the Australian Charities and Not-for-profits Commission (ACNC) as a charity and endorsed by us.
6.1 Employees, independent contractors or volunteers
It is important to determine whether an individual is an employee, volunteer or contractor of your organisation. This status may affect the tax treatment between the individual and the organisation. You should always consider the facts and circumstances of each individual when determining whether they are an employee, volunteer or independent contractor.
Employees
For the purposes of FBT, an employee is a person who receives (or is entitled to receive) salary or wages in return for work or services provided.
| If an organisation provides non-cash benefits to employees in lieu of salary and wages, FBT can apply. |
Independent contractors
An independent contractor is an entity (such as an individual, partnership, trust or company) that agrees to produce a designated result for an agreed price.
| For more information about determining if workers are employees or contractors, refer to How to determine if workers are employees or independent contractors (NAT 2780). |
Volunteers
A volunteer is not paid for work. Reimbursing a volunteer for out-of-pocket expenses does not cause them to become an employee. Generally, benefits provided to volunteers don't attract FBT.
6.2 FBT concessions and endorsement
The FBT concessions which specifically apply when the employer is a non-profit organisation are:
- FBT exemption - subject to capping
- FBT rebate
- certain benefits provided by registered religious institutions and non-profit companies
- car parking
- remote area concessions.
| For these concessions to apply to a non-profit entity that is a charity, the entity must be registered with the ACNC as a charity (Registered Charity). Endorsement of a Registered Charity is also required to access:
|
| More information Application for endorsement as a tax concession charity or income tax exempt fund (NAT 10651) |
A charity which is registered by the ACNC as a charity is a Registered Charity. The ACNC also registers each Registered Charity in a sub-type according to its charitable purposes. The relevant sub-types for FBT purposes are:
- Registered Health Promotion Charity (charitable institution whose principal activity is to promote the prevention or the control of diseases in human beings)
- Registered Public Benevolent Institution (charitable institution who is a public benevolent institution)
- Registered Religious Institution (charitable institution who is a religious institution)
| Where an entity was endorsed for the operation of a public benevolent institution as at 2 December 2012, that operation is now treated by the ACNC as an entity separate to the main entity and as a Registered Public Benevolent Institution, from 3 December 2012. |
Registered Charities who are applying for endorsement can indicate on their application form the type of FBT concession and the date from which it applies.
A Registered Charities endorsement details are recorded on the Australian Business Register .
6.3 FBT exemption - subject to capping
Some organisations are exempt from FBT where the total grossed-up value of certain benefits (which are benefits not otherwise exempt) provided to each employee during the FBT year is equal to, or less than, the capping threshold. If the total grossed-up value of fringe benefits provided to an employee is more than that capping threshold, your organisation will need to pay FBT on the excess.
Table 1 outlines the types of organisations that are eligible for FBT exemption, the capping thresholds that apply and whether the organisation needs to be endorsed by us to access the FBT exemption.
Table 1: Types of organisations eligible for FBT exemption
Types of organisations eligible for FBT exemption# | Capping threshold## | Does the organisation need to be endorsed by us to access FBT exemption?### |
Registered Public benevolent institutions (other than hospitals) | $30,000 per employee | Yes |
Registered Health promotion charities | $30,000 per employee | Yes |
Public and non-profit hospitals | $17,000 per employee | No |
Public ambulance services | $17,000 per employee | No |
Notes to table 1
#This table does not include FBT exemptions for Registered Religious Institutions and non-profit companies which exemptions are not subject to capping. For more information on those exemptions see 6.5 Concessions available for religious institutions and 20.5 Religious and non-profit organisation exemptions .
A hospital is an institution where patients are received for continuous medical care and treatment for sickness, disease or injury. The provision of accommodation is integral to a hospital's care and treatment.
Clinics that mainly treat ambulatory patients who return to their homes after each visit are not hospitals. However, day surgeries that provide beds for patients to recover after surgery may be hospitals.
Homes to provide nursing care for feeding, cleanliness and the like are not hospitals. However, nursing homes for people suffering from illness are accepted as hospitals.
Hospices for the terminally ill will generally be hospitals. Minor outpatient and nursing care will not prevent an institution being a hospital.
Non-profit hospitals include those run by churches and religious orders who are rebatable employers (see 6.4 FBT Rebate )
| More information For information about: Registered Public benevolent institutions (other than hospitals), see Is your organisation a public benevolent institution? (QC 26553). For information about Registered Health promotion charities, see Is your organisation a health promotion charity? (QC 26552) |
## The $30,000 capping threshold applies even if the Registered Public Benevolent Institution or Registered Health Promotion Charity did not employ the employee for the full FBT year. For example, if you employed the employee between October and March and the total grossed-up value of benefits provided was $25,000, FBT will not be payable.
If an organisation is a Registered Public Benevolent Institution and a hospital, the $17,000 capping threshold applies. The organisation cannot choose the Registered Public Benevolent Institution exemption cap.
### For more information, see Endorsement requirements for charities and income tax exempt funds . A condition of endorsement is that Registered Public Benevolent Institutions and Registered Health Promotion Charities need to be registered with the ACNC to access the FBT exemption.
| It is important to check the notes to table 1 as your organisation may need to meet certain requirements before it can access a concession. |
6.4 FBT rebate
The FBT rebate is an entitlement to a rebate equal to 48% of the gross FBT payable, subject to a capping threshold.
Organisations that qualify for an FBT rebate are referred to as 'rebatable employers'.
Rebatable employers are entitled to have their liability reduced by a rebate equal to 48% of the gross FBT payable (subject to a $30,000 capping threshold). If the total grossed-up taxable value of fringe benefits provided to an employee is more than $30,000 a rebate cannot be claimed for the FBT liability on the excess amount. The $30,000 capping threshold applies even if the rebatable employer did not employ the employee for the full FBT year. For example, if the total grossed-up value of benefits provided to an employee between October and March was $15,000, a rebate applies to all of the FBT payable for providing these benefits.
Registered Charities must be endorsed by us to access the FBT rebate. The FBT rebate is only available to Registered Charities that are institutions.
| The FBT rebate is not available to:
A Registered Charity is an entity who is registered by the ACNC as a charity. See also below for information about the entitlement to the FBT rebate for some government bodies and charitable funds for 2013 and 2014. |
| For more information refer to Endorsement to access charity tax concessions . |
Other non-profit organisations can self-assess their entitlement to the FBT rebate provided they are a rebatable employer.
Rebatable employers
Rebatable employers are certain non-government, non-profit organisations. Organisations that qualify for the FBT rebate include:
- Registered Charities who are an institution; who are not established under a government law and who are endorsed as a charitable institution for these purposes;
- certain educational, scientific or public educational institutions
- trade unions and employer associations
- non-profit organisations established to encourage music, art, literature or science
- non-profit organisations established to encourage or promote a game, sport or animal races
- non-profit organisations established for community service purposes
- non-profit organisations established to promote the development of aviation or tourism
- non-profit organisations established to promote the development of Australian information and communications technology resources
- non-profit organisations established to promote the development of the agricultural, pastoral, horticultural, viticultural, aquacultural, fishing, manufacturing or industrial resources of Australia.
Temporary entitlement to the FBT rebate - some government bodies and charitable funds
| Transitional changes to the FBT law as a result of the introduction of the ACNC has meant that Registered Charities that are institutions of the Commonwealth, a State or a Territory and also Registered Charities that are charitable funds may be eligible for the FBT rebate for the period 3 December 2012 to 31 March 2013. Some entities may also be eligible for the FBT rebate for the period 1 April 2013 to 31 March 2014. |
The table below summaries a Registered Charities entitlement to the FBT rebate under these transitional changes to the FBT law.
| If.. | Then.. |
|---|---|
Your charity is not registered with the ACNC | It is not entitled to the FBT rebate |
Your charity is a Registered Public Benevolent Institution or Registered Health Promotion Charity | It is not entitled to the FBT rebate |
Your Registered Charity is not endorsed to access the FBT rebate tax concession and is a charitable institution | It is not entitled to the FBT rebate |
Your Registered Charity is not endorsed to access the FBT rebate tax concession and is not an institution |
|
Your Registered Charity is endorsed to access the FBT rebate tax concession, commencing from a date of endorsement which is before 30 June 2013. |
|
Your Registered Charity is endorsed to access the FBT rebate tax concession commencing from a date of endorsement which is on or after 30 June 2013 | It is entitled to the FBT rebate from the commencement date of the endorsement, provided all of the conditions are met. |
Conditions
For both:
- Registered Charities (including new charities) who are endorsed from 30 June 2013 and
- Existing Registered Charities (those who are endorsed before 30 June 2013)
the following conditions to be entitled to the FBT rebate apply from the FBT year commencing 1 April 2014:
- be a Registered Charity
- be endorsed for the income tax exemption
- be an institution
- not be a Registered Public Benevolent Institution
- not be a Registered Health Promotion Charity
- not be an institution of the Commonwealth, a State or a Territory
- endorsed for the FBT rebate by satisfying all of the above 6 conditions
| Example:
A university is a charitable institution that has been endorsed as income tax exempt since 2008. On 3 December 2012, the university is deemed to be registered with the ACNC. The university is an institution of the Commonwealth, a State or a Territory. On 30 September 2013, the university applied for endorsement for the FBT rebate, requesting that it be effective from 3 December 2012, and it was granted endorsement effective from that date. The university:
As a result, the university is eligible for the FBT rebate for the period:
The university is not eligible for the FBT rebate from 1 April 2014 because it is an institution of the Commonwealth, a State or a Territory. The Commissioner revokes the university's endorsement from that date. |
6.5 Concessions available for religious institutions
Your organisation is a religious institution if it is both:
- non-profit
- an Institution to advance or promote religious purposes.
| For more information refer to Religious institutions: access to tax concessions . |
FBT rebate
Religious institutions are eligible for the FBT rebate when they are a Registered Charity - subject to a capping threshold of $30,000. If a religious institution is a charity it must be registered with the ACNC as a charity and endorsed by us as a charitable institution to access the FBT rebate.
| For more information see 6.4 FBT rebate. |
Other concessions
Registered Religious Institutions may also be eligible for FBT concessions for benefits they provide to:
- religious practitioners
- live-in carers
- domestic employees.
The religious institution does not need to be endorsed by us to access these concessions, but it must be registered with the ACNC as a charity with a purpose that is the advancement of religion.
| For more information refer to 20.5 and also Taxation Ruling TR 92/17 Income tax and fringe benefits tax: exemptions for 'religious institutions'. |
6.6 Non-profit companies and live-in residential carers
The following non-profit organisations that provide care for elderly or disadvantaged people, can provide certain FBT exempt benefits to live-in carers:
- a company that is a Registered Charity
- a non-profit company that is not a charity.
The exemption is for live-in carers where the carer resides with the elderly or disadvantaged person in residential accommodation you provide. The benefits that may be exempt include the employees' live-in accommodation, residential fuel, meals or other food and drink.
For your organisation to be a non-profit company:
- it must be a company that is not carried on for the purposes of profit or gain to its individual members
- its constituent documents must prohibit it from making any distribution, whether in money, property or otherwise, to its members.
Your organisation can be a non-profit company and still make a profit. However, any profits it makes must be used to carry out its purposes. The profits must not be distributed to the members.
The prohibition on distributions applies while the organisation is operating, and on its winding up. If it permits the organisation's members to transfer the assets to themselves on winding up, it is not a non-profit company.
A non-profit company can make payments to its members as bona fide remuneration for services they have provided to it, and as reasonable compensation for expenses incurred on behalf of the organisation.
An organisation carried on for the joint or common benefit of members can qualify as a non-profit company. An example would be a professional association established to advance the professional interests of its members.
6.7 Other concessions
Car parking
A car parking fringe benefit and car parking expense payment fringe benefit is exempt from FBT when provided by:
- Registered Charities
- A scientific institution (other than an institution run for the purposes of profit or gain to its shareholders or members)
- A public educational institution.
Remote area concessions
An extended definition of remote applies to housing benefits provided for employees of:
- a public hospital
- a government body where the duties of the employee are exclusively performed in, or in connection with, a public hospital or a non-profit hospital
- a hospital carried on by a non-profit society or a non-profit association that is a rebatable employer.
- a Registered Charity
- a public ambulance service
- a police service.
This means that more areas will be considered remote for the purposes of the:
- remote area housing exemption explained at 10.8
- remote area residential fuel reduction explained at 19.2
6.8 Calculating FBT - Benefits excluded from FBT capping measures
The following fringe benefits, which are excluded benefits for reporting purposes, are also specifically excluded from an employee's individual fringe benefits amount and, as such, are not included in the calculation for certain employer's respective capping thresholds.
Meal entertainment
The provision of benefits that constitute the provision of meal entertainment, whether or not the employer elected to value the benefits as meal entertainment fringe benefits. This applies to meal entertainment provided by Registered Public Benevolent Institutions, Registered Health Promotion Charities, public hospitals, non-profit hospitals, public ambulance services and rebatable employers.
Entertainment facility leasing expenses
Entertainment facility leasing expenses when incurred by Registered Public Benevolent Institutions, Registered Health Promotion Charities, public hospitals, non-profit hospitals, public ambulance services and rebatable employers.
Car parking
Car parking fringe benefits when provided by Registered Public Benevolent Institutions, Registered Health Promotion Charities, public hospitals, non-profit hospitals, public ambulance services and rebatable employers.
6.9 Calculating the FBT exemption
Where your organisation (Registered Health Promotion Charity or Registered Public Benevolent Institution or public or non-profit hospital or public ambulance service) provides employees with benefits above the FBT exemption capping (either $30,000 or $17,000), you are subject to FBT on the aggregate non-exempt amount.
| The PBI, HPC and rebatable employers calculator will help you calculate your FBT liability. The $30,000 capping threshold only has been considered in the calculator. You can also use the steps in tables 1 and 2 below to help you calculate the FBT payable. |
In order to calculate your FBT payable, you must first calculate the individual grossed-up type 1 and type 2 non-exempt amounts .
Table 1 - Calculating the individual grossed-up type 1 and 2 non-exempt amounts
| Step | Action | Result | |||
|---|---|---|---|---|---|
1 | Establish what the employee's individual fringe benefits amount would be if the capping concession was not available. The individual fringe benefits amount is the value of all benefits, other than excluded benefits. For a list of excluded fringe benefits, refer to Reportable fringe benefits . | $xxx | |||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. | $xxx
| |||
3 | Identify those fringe benefits not taken into account under amount 1.
| $xxx
| |||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits if the capping concession was not available. For a list of excluded fringe benefits, refer to Reportable fringe benefits . Excluded benefits specifically not to be included in this calculation are listed in section 6.8 . | $xxx | |||
5 | Identify the GST-creditable fringe benefits included in step 4. | $xxx
| |||
6 | Identify those excluded fringe benefits that are not taken into account under amount 2.
| $xxx
| |||
7 | Add amount 1 and amount 2.
| Type 1 individual base non-exempt amount | |||
8 | Use the following formula: Type 1 individual base non-exempt amount
(that is, the result from step 7 x 2.0647). | Individual grossed-up type 1 non-exempt amount | |||
9 | Add amount 3 and amount 4
| Type 2 individual base non-exempt amount | |||
10 | Use the following formula: Type 2 individual base non-exempt amount
(that is, the result from step 9 x 1.8692). | Individual grossed-up type 2 non-exempt amount |
After calculating the individual grossed-up type 1 and type 2 amounts , follow the steps in table 2 to calculate your FBT payable .
Table 2 - Calculating your FBT payable
| Step | Action | Result |
|---|---|---|
1 | For each employee add :
| The result is the individual grossed-up non-exempt amount . |
2 | Subtract the appropriate capping threshold from the individual grossed-up non-exempt amount for each employee. Capping thresholds:
| If the individual grossed-up non-exempt amount is less than or equal to the appropriate capping threshold ($30,000 or $17,000), the amount calculated under this step is nil . |
3 | Add together all the amounts calculated under step 2 for each employee. | The total is your aggregate non-exempt amount . |
4 | Multiply the result in step 3 by the FBT rate (currently 46.5%). | The result is your FBT payable . |
Example - FBT exemption capping threshold exceeded
An employee of a Registered Health Promotion Charity receives the following benefits during an FBT year: | ||
A car fringe benefit | $7,700 | GST taxable supply with an entitlement to GST credits. |
Restaurant meals | $1,100 | Valued as expense payment fringe benefits. Excluded fringe benefit with an entitlement to GST credits. |
Reimbursement of school fees | $6,000 | Expense payment fringe benefit. GST-free supplies with no entitlement to GST credits. |
Remote area rent reimbursement | $3,000 | Excluded fringe benefit for payment summary reporting purposes only. No entitlement to GST credits. |
In order to calculate their FBT payable, the Registered Health Promotion Charity must first calculate the individual grossed-up type 1 and type 2 non-exempt amounts.
Table 1 - Calculating the individual grossed-up type 1 and 2 non-exempt amounts
| Step | Action | Result | |||
|---|---|---|---|---|---|
1 | Establish what the employee's individual fringe benefits amount would be if the capping concession was not available. The individual fringe benefits amount is the value of all benefits other than excluded fringe benefits. | The individual fringe benefits amount = Car fringe benefit + reimbursement of school fees. $7,700 + $6,000
The individual fringe benefits amount is $13,700 . | |||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. | $7,700
In this example, the employer is entitled to GST credits for the car fringe benefit. | |||
3 | Identify those fringe benefits not taken into account under amount 1
| $13,700 - $7,700
| |||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits if the capping concession was not available. These excluded fringe benefits are listed in Reportable fringe benefits. Excluded benefits specifically not to be included in this calculation are listed in section 6.3 . | $3,000 The excluded fringe benefits are the restaurant meals fringe benefit and the remote area rent reimbursement. The restaurant meals fringe benefit of $1,100 is specifically not included in this calculation. | |||
5 | Identify the GST-creditable fringe benefits included in step 4. | $0
The employer is not entitled to GST credits for the remote area rent reimbursement. | |||
6 | Identify those excluded fringe benefits that are not taken into account under amount 2
| $3,000 - $0
| |||
7 | Add amount 1 and amount 2
| $7,700 + $0
The type 1 individual base non-exempt amount is $7,700. | |||
8 | Use the following formula: Type 1 individual base non-exempt amount
(that is, the result from step 7 x 2.0647). | $7,700 x 2.0647
The individual grossed-up type 1 non-exempt amount is $15,898. | |||
9 | Add amount 3 and amount 4
| $6,000 + $3,000
The type 2 individual base non-exempt amount is $9,000. | |||
10 | Use the following formula: Type 2 individual base non-exempt amount
(that is, the result from step 9 x 1.8692). | $9,000 x 1.8692
The individual grossed-up type 2 non-exempt amount is $16,822. |
After calculating the individual grossed-up type 1 and type 2 amounts, the Registered Health Promotion Charity will calculate their FBT payable by following the steps in table 2.
Table 2 - Calculating the FBT payable
| Step | Action | Result |
|---|---|---|
1 | For each employee add :
| $15,898 +
The individual grossed-up non-exempt amount is $32,720. |
2 | Subtract the appropriate capping threshold from the individual grossed-up non-exempt amount for each employee. Capping thresholds:
(that is, the result from step 1 minus the applicable capping threshold). | $32,720 -
|
3 | Add together all the amounts calculated under step 2 for each employee. | As there is only one employee, the result is the same as for step 2, ie $2,720. The aggregate non-exempt amount is $2,720. |
4 | Multiply the result in step 3 by the FBT rate (currently 46.5%). | $2,720 x
The FBT payable by Registered Health Promotion Charity is $1,264.80. |
6.10 Calculating the FBT rebate
Registered Charities and most non-government organisations that are income tax exempt, qualify for an FBT rebate. As a rebatable employer, you are eligible for a rebate of 48% of the amount of FBT that would otherwise be payable.
The maximum grossed-up value of benefits that can be provided to an employee, without losing the concession, is $30,000. The $30,000 capping threshold applies even if you did not employ the employee for the full FBT year. For example, if the total grossed-up value of the benefits you provide to an employee between October and March is $15,000, a rebate applies to all of the FBT payable for providing these benefits.
If the total grossed-up value of the fringe benefits provided to an individual employee is more than $30,000, a rebate can't be claimed for the FBT liability on the excess amount.
Use the following formula to calculate the rebate available to you:
0.48 | X | (gross tax - aggregate non-rebatable amount) | X |
|
Gross tax is the FBT you would have paid if you had not been entitled to claim a rebate.
Rebatable days in the year are the number of days during the FBT year that you qualified as a rebatable employer.
For the purpose of calculating the rebate, the total days in the year means the number of days you were an employer. It does not refer to the total number of days in the year.
The aggregate non-rebatableamount is the proportion of the taxable value of fringe benefits for which you can't obtain a rebate.
| The PBI, HPC and rebatable employers calculator will help you calculate your FBT liability. The $30,000 capping threshold for rebatable employers has been considered in the calculator. You can also use the steps in tables 1 and 2 below to help you calculate the FBT payable. |
To calculate your FBT payable, you need to first calculate your gross tax (see table 1).
Table 1 - Calculating your gross tax
Follow the steps below to calculate your gross tax.
| Step | Action | Result | |||
|---|---|---|---|---|---|
1 | Establish the employee's individual fringe benefits amount. The individual fringe benefits amount is the value of all benefits other than excluded benefits. For a list of excluded fringe benefits, refer to Reportable fringe benefits . | $xxx | |||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. | $xxx
| |||
3 | Identify those fringe benefits not taken into account in the calculation for amount 1.
| $xxx
| |||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits . | $xxx | |||
5 | Identify the GST-creditable fringe benefits included in step 4. | $xxx
| |||
6 | Identify those excluded fringe benefits that are not taken into account under amount 2.
| $xxx
| |||
7 | Add amount 1 and amount 2
| Type 1 individual fringe benefits taxable amount | |||
8 | Use the following formula: Type 1 individual fringe benefits amount
(that is, the result from step 7 x 2.0647). | Individual grossed-up type 1 fringe benefits taxable amount | |||
9 | Add amount 3 and amount 4.
| Type 2 individual fringe benefits taxable amount | |||
10 | Use the following formula: Type 2 individual fringe benefits amount
(that is, the result from step 9 x 1.8692) . | Individual grossed-up type 2 fringe benefits amount | |||
11 | For each employee add:
(that is, the result from step 8 plus the result from step 10) . | Individual fringe benefits taxable amount | |||
12 | Add together the individual fringe benefits taxable amount calculated for every employee
| Total fringe benefits taxable amount | |||
13 | Multiply the total fringe benefits taxable amount by the FBT rate.
| Gross tax |
You need to then calculate your FBT rebate (see table 2, following).
Table 2 - Calculating your FBT rebate
Follow the steps below to calculate your FBT rebate.
| Do you provide any of the following excluded benefits?
If no :
If yes , start from step 1 in table 2 below. |
Although these excluded fringe benefits are included in the calculation of the amount of FBT to be paid by the employer, they are excluded from the calculation of the amount to be reported on the employee's payment summary and for the FBT rebate capping threshold of $30,000.
| Step | Action | Result | ||||||
|---|---|---|---|---|---|---|---|---|
1 | Establish the employee's individual fringe benefits amount. The individual fringe benefits amount is the value of all benefits other than excluded benefits. These excluded fringe benefits are listed in Reportable fringe benefits . (This will be the same amount calculated in table 1, step 1). | $xxx | ||||||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. (This will be the same amount calculated in table 1, step 2). | $xxx
| ||||||
3 | Identify those fringe benefits not taken into account in the calculation for step 2
(This will be the same amount calculated in table 1, step 3). | $xxx
| ||||||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits . Excluded benefits specifically not to be included in this calculation are listed in section 6.3 . | $xxx | ||||||
5 | Identify the GST-creditable fringe benefits included in step 4. | $xxx
| ||||||
6 | Identify those excluded fringe benefits that are not taken into account under step 5.
| $xxx
| ||||||
7 | Add amount 1 and amount 2.
| Type 1 individual base non-rebatable amount | ||||||
8 | Use the following formula:
(That is, the result from step 7 x 2.0647). | Individual grossed-up type 1 non-rebatable amount | ||||||
9 | Add amount 3 and amount 4.
| Type 2 individual base non-rebatable amount | ||||||
10 | Use the following formula: Type 2 individual base non-rebatable amount
(That is, the result from step 9 x 1.8692). | Individual grossed-up type 2 non-rebatable amount | ||||||
11 | For each employee add:
| The result is the individual grossed-up non-rebatable amount for the employee. | ||||||
12 | Subtract $30,000 from the individual grossed-up non-rebatable amount for each employee.
| If the individual grossed-up non-rebatable amount for an employee is equal to or less than $30,000, the amount calculated under this step is nil. | ||||||
13 | Add together the amounts calculated at step 12 for each employee. | $xxx | ||||||
14 | Multiply the total amount calculated under step 13 by the FBT rate. | The result is your aggregate non-rebatable amount for the FBT year. | ||||||
15 | Use this formula: 0.48 X (gross tax - aggregate non-rebatable amount)
That is: 0.48 X (table 1, step 13 minus table 2, step 14)
| The result is your FBT rebate . |
You then need to calculate your FBT payable (see table 3, following).
Table 3 - Calculating your FBT payable
Use the following step to calculate your FBT payable.
| Step | Action | Result |
|---|---|---|
1 | Gross tax - FBT rebate (that is, the result from table 1, step 13 minus the result from table 2, step 15). | The result is your FBT payable . |
Example - FBT rebate capping threshold exceeded
A rebatable employer provides the following benefits to a single employee during the FBT year. The employer was a rebatable employer from 31 October in an FBT year. | ||
Car fringe benefit | $7,700 | GST taxable supply with an entitlement to GST credits. |
Restaurant meals | $1,100 | Valued as expense payment. Excluded fringe benefit with an entitlement to GST credits. |
Reimbursement of school fees | $6,000 | Expense payment fringe benefit. GST-free supply with no entitlement to GST credits. |
Remote area rent reimbursement | $3,000 | Excluded fringe benefit for payment summary reporting purposes only. No entitlement to GST credits. |
To calculate their FBT payable, the rebatable organisation needs to first calculate their gross tax (see table 1).
Table 1 - Calculating the gross tax
| Step | Action | Result | |||
|---|---|---|---|---|---|
1 | Establish the employee's individual fringe benefits amount. The individual fringe benefits amount is the value of all benefits other than excluded benefits. | The individual fringe benefits amount = Car fringe benefit + reimbursement of school fees $7,700 +
The individual fringe benefits amount is $13,700. | |||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. | $7,700
In this example, the employer is entitled to GST credits for the car fringe benefit. | |||
3 | Identify those fringe benefits not taken into account in the calculation for amount 1.
| $13,700 -
| |||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits. | $1,100 +
The excluded fringe benefits are the restaurant meals and the remote area rent reimbursement. | |||
5 | Identify the GST-creditable fringe benefits included in step 4. | $1,100
In this example, the employer is entitled to GST credits on the restaurant meals. | |||
6 | Identify those excluded fringe benefits that are not taken into account under amount 2.
| $4,100 -
| |||
7 | Add amount 1 and amount 2.
| $7,700 +
The type 1 individual fringe benefits taxable amount is $8,800. | |||
8 | Use the following formula: Type 1 individual fringe benefits amount
(That is, the result from step 7 x 2.0647). | $8,800 x
The individual grossed-up type 1 fringe benefits taxable amountis $18,169 . | |||
9 | Add amount 3 and amount 4.
| $6,000 +
The type 2 individual fringe benefits taxable amountis $9,000 . | |||
10 | Use the following formula: Type 2 individual fringe benefits amount
(That is, the result from step 9 x 1.8692). | $9,000 x
The individual grossed-up type 2 fringe benefits amountis $16,822 . | |||
11 | For each employee add:
(That is, the result from step 8 plus the result from step 10). | $18,169 +
The individual fringe benefits taxable amountis $34,991 . | |||
12 | Add together the individual fringe benefits taxable amount calculated for every employee.
| There is only one employee, so the total fringe benefits taxable amount is $34,991 . | |||
13 | Multiply the total fringe benefits taxable amount by the FBT rate.
| $34,991 x
The gross tax is $16,270.81 . |
The rebatable organisation then needs to then calculate their FBT rebate (see table 2).
Table 2 - Calculating your FBT rebate
| Step | Action | Result | ||||||
|---|---|---|---|---|---|---|---|---|
1 | Establish the employee's individual fringe benefits amount. The individual fringe benefits amount is the value of all benefits other than excluded benefits. (This will be the same amount calculated in table 1, step 1). | $13,700 (From table 1,
| ||||||
2 | Identify the amount of GST-creditable fringe benefits included in the amount for step 1. (This will be the same amount calculated in table 1, step 2). | $7,700
(From table 1,
| ||||||
3 | Identify those fringe benefits not taken into account in the calculation for step 2
(This will be the same amount calculated in table 1, step 3). | $6,000
(From table 1,
| ||||||
4 | Determine the employee's share of the benefits that would be excluded fringe benefits. These excluded fringe benefits are listed in Reportable fringe benefits . Benefits specifically not included in this calculation are:
| $3,000 (The $3,000 is the remote area rent reimbursement. The restaurant meals of $1,100 are specifically not included here). | ||||||
5 | Identify the GST-creditable fringe benefits included in step 4. | $0
(The employer is not entitled to GST credits for the remote area rent reimbursement). | ||||||
6 | Identify those excluded fringe benefits that are not taken into account under step 5.
| $3,000 - $0
| ||||||
7 | Add amount 1 and amount 2.
| $7,700 + $0
The type 1 individual base non-rebatable amountis $7,700 . | ||||||
8 | Use the following formula: Type 1 individual base non-rebatable amount
(That is, the result from step 7 x 2.0647). | $7,700 x 2.0647
The individual grossed-up type 1 non-rebatable amountis $15,898 . | ||||||
9 | Add amount 3 and amount 4.
| $6,000 + $3,000
The type 2 individual base non-rebatable amountis $9,000 . | ||||||
10 | Use the following formula: Type 2 individual base non-rebatable amount
(That is, the result from step 9 x 1.8692). | $9,000 x 1.8692
The individual grossed-up type 2 non-rebatable amountis $16,822 . | ||||||
11 | For each employee add:
| $15,898 + $16,822
The individual grossed-up non-rebatable amountis $32,720 . | ||||||
12 | Subtract $30,000 from the individual grossed-up non-rebatable amount for each employee. | $32,720 - $30,000
| ||||||
13 | Add together the amounts calculated at step 12 for each employee. | As there is only one employee, this amount is $2,720 . | ||||||
14 | Multiply the total amount calculated under step 13 by the FBT rate. | $2,720 x 0.465
Theaggregate non-rebatable amount is $1,264.80 . | ||||||
15 | Use this formula: 0.48 X (gross tax - aggregate non-rebatable amount)
That is: 0.48 X (table 1, step 13 - table 2, step 14)
| 0.48 X ($16,270.81 - $1,264.80) X 183
=0.48 X $15,006.01 X 1 = $7,202.88 The FBT rebate is $7,202.88 . |
The rebatable organisation then needs to calculate their FBT payable (see table 3).
Table 3 - Calculating your FBT payable
| Step | Action | Result |
|---|---|---|
1 | Gross tax - FBT rebate (That is, the result from table 1, step 13 minus the result from table 2, step 15). | $16,270.81 - $7,202.88
The FBT payable is $9,067.93 . |
6.11 Reportable fringe benefits
If the value of certain fringe benefits provided to your employees or their associates exceeds $2,000 in an FBT year, you must record the grossed-up taxable value of those benefits on their payment summaries for the corresponding income year.
This FBT reporting requirement applies even if you organisation is not liable to pay FBT. For a list of benefits that are excluded from the reporting requirements, refer to Reportable fringe benefits .
More information
For more information on:
- charities and registration, refer to Income tax guide for non-profit organisations
- Registered Public Benevolent Institutions and Registered Health Promotion Charities and registration, refer to GiftPack
- applying for endorsement, refer to Application for endorsement as a tax concession charity or income tax exempt fund
- reportable fringe benefits, refer to Reportable fringe benefits - facts for employees .
- Taxation Ruling TR 2003/5 - Income tax and fringe benefits tax: public benevolent institutions .
Changes and updates
The electronic version of the guide is reviewed on a regular basis. The following changes and updates have been made to this chapter.
| Date | Update |
|---|---|
December 2013 | Revised to reflect new ACNC measures. |
Last Modified: Monday, December 2013
ATO references:
NO NAT 1054
| Date: | Version: | ||
| 30 March 1997 | Original document | ||
| You are here | 13 December 2013 | Updated document | |
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| 22 November 2024 | Current document | ||
| Chapters 6 , 9 , 10 , 12 , 17 , 18 , 19 and 20 have been updated. See the Changes and update sections in the relevant chapters for details. | |||