FBT Free Employee Benefits
Rewarding employees
Accounting professionals are well placed to help clients offer FBT-exempt benefits to their staff. Examples include:
- Private use of an electric car that was both held and used on or after 1 July 2022 and wasn’t subject to luxury car tax (among other conditions).
- Portable electronic devices that are mainly used for work purposes, such as laptops and mobile phones.
- A cash bonus to cover a benefit such as a gym membership (adjusted to cover the income tax payable by the employee).
- A one-off benefit worth less than $300, such as a dinner or night away to celebrate their birthday (check minor benefits exemption rules)
Other Ways a Public Accountant Can Help Your Company with FBT
Accountants should educate their clients about FBT to prevent these mistakes, and aim to identify the clients with potential issues.
“This could include ensuring clients are registered for FBT and providing information packs with common FBT-eligible items and questions to the client to determine if they are subject to FBT,” Gibson says.
“If the client is found to be subject to FBT, the accountant should work closely with them to understand any issues and ensure compliance.”
The ATO says it encourages tax professionals to help employers by passing on the quick reference list, determining the correct taxable value of the benefits provided, ensuring the FBT return is lodged by the due date, and checking that records are kept to show their FBT position, even if there is ultimately no liability.
“One way that accountants can simplify the explanation of FBT to their clients is by providing a comprehensive document via email that outlines the main types and items that are eligible for FBT based on ATO regulations,” Gibson says.
“The accountant can then ask the client if they provide any of those benefits to their employees and if so, proceed to assess the situation with the client. Additionally, providing a clear checklist or flowchart can help clients understand the criteria for FBT eligibility.”