Getting paid a salary or wages in the workplace is common but sometimes there are hidden benefits which attract FBT.
There are various benefits which an employee may be able to include in a salary package. Employers arrange this with their employees as it can help their employees have lower taxable income, meaning more money goes into their pockets. This forms part of the employee’s remuneration, and many of these benefits do incur Fringe Benefits Tax which is paid by the employer.
The common items usually salary packaged include:
- Health insurance
- Housing or accommodation benefits
- School or Childcare fees
- Utility Bills such as electricity or telecommunications
- Other personal expenses
The value of the benefits received will appear on an employee’s payment summary during the tax period. Employees are not required to pay tax or Medicare levy on this amount as FBT is an employer responsibility.
Benefits such as entertainment and car parking are also part of FBT obligations that must be paid.
Do you have a salary package agreement with your employees? Or is considering agreeing to one but not sure how it affects your bottom line?
If you offer a fringe benefit - talk to us about what you need to do before the ATO does! We’ll be glad to assist you in your decision-making process. Book a consultation here today, or call us on (07) 5413 9300.