FBT law includes different categories of fringe benefits and specific valuation rules for each category. FBT is a tax employers pay on benefits they provide to their employees, including their employees’ family or other associates. The benefit may be in addition to, or part of, an employee’s salary or wages.
Employers who provide fringe benefits must pay FBT, even if the benefit provided is to an associate of their employee or by a third party under an arrangement with the employer. The type of fringe benefits employers must pay FBT on include:
Car fringe benefits
If an employer makes a car they own or lease available for the private use of an employee, they may have to provide a car fringe benefit.
Car parking fringe benefits
A car parking fringe benefit may arise if an employer provides car parking to an employee and meets several conditions (which can be found on the ATO’s website).
Entertainment and fringe benefits
The provision of entertainment includes providing food, drink or recreation and accommodation or travel in connection with, such entertainment.
Expense payment fringe benefits
Employers may provide an expense payment benefit if an employee incurs expenses and the employer reimburses them for the expense or pays a third party for the expenses.
Loan fringe benefits
Employers may have to provide a loan fringe benefit if they give their employee a loan and charge no interest or a low rate of interest.
Debt waiver fringe benefits
Employers may have to provide a debt waiver fringe benefit if they do not require an employee to repay a debt.
Housing fringe benefits
A housing fringe benefit may arise when an employer provides accommodation to their employee rent-free or at a reduced rent where that accommodation is their usual place of residence.
Board fringe benefits
A board fringe benefit may arise if an employer provides an employee with accommodation and an entitlement to at least two meals a day.
Living away from home allowance (LAFHA) fringe benefits
A LAFHA fringe benefit may arise if an employer pays an allowance to an employee to cover additional expenses incurred, because they are temporarily required to live away from their normal place of residence to perform their employment duties.