FBT deadline approaching
With many businesses looking at ways to incentivise and retain employees in the wake of the pandemic and the ‘great resignation’, fringe benefits have become topical again with some important considerations to be made before the upcoming 21 May deadline.
With tax time looming, it’s important to understand your responsibilities as an employer using fringe benefits with your staff.
What are fringe benefits?
Generally, fringe benefits are any type of non-wage payment or benefit offered to employees by their employers as a result of being employed with the business; a list of ‘job perks’ that can include: employer-provided vehicles, health insurance, entertainment, mobile phone contributions, and parental leave.
Due to the pandemic, the shift to working from home also caused many businesses to provide home office equipment such as desks, laptops and monitors. These items may be subject to COVID-19 exemptions, as well as PCR and rapid antigen testing kits that employees are legally required to purchase or undertake.
When is FBT lodgement due?
Employers are required to lodge an FBT return if they have a liability during an FBT year (1 April to 31 March).
If you prepare your own FBT returns, these must be lodged and paid by 21 May, and the same date applies if a tax agent lodges your return by paper. If a tax agent lodges your return electronically, the due date for lodgment and payment is 25 June.
The ATO website provides a checklist for lodgment and warns that all records and calculations of FBT must be retained, stating that: “You’ll need to work out if you have an FBT liability for fringe benefits you’ve provided to your employees (or their associates) between 1 April 2021 and 31 March 2022.”
What if my business does not have an FBT liability?
If your business is registered for FBT but has not incurred an FBT liability, you must still complete and lodge a notice of non-lodgement form with the ATO.
Keeping your FBT records
Any fringe benefits that have a taxable amount of over A$2,000 must be reported during the FBT year.
Records of these fringe benefits and their taxable value must be retained, especially if businesses want to use exemptions and concessions to their advantage to reduce their FBT liability. To calculate your FBT, the ATO has provided a list of steps to follow.
Ensure these records are available for at least five years from the FBT return date.
FBT checklist for 2022
If you’re new to the process, the ATO has provided detailed guidance on how to lodge and pay your FBT.
Of course, we are always happy to assist you and take any FBT concerns off your plate. Contact us when you’re ready.
IMPORTANT NOTICE
This blog post contains general information only and has been prepared by Allworths without reference to your objectives, financial situation or needs. Allworths cannot guarantee the accuracy, completeness or timeliness of the information contained here. By making this information available to you, we are not providing professional advice or recommendations. Before acting on any of the information contained here, you should seek professional advice.
