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Reportable Fringe Benefits Facts for Employees

What is a fringe benefit?

Basically, a fringe benefit is a benefit provided to you or an associate (for example, your spouse or children) because of your employment.

For example, you could receive a benefit when you:

  • use a work car for private purposes
  • are provided with a cheap loan
  • are provided with free private health insurance
  • are provided with cleaning services for your private residence, or
  • enter into a salary sacrifice arrangement.

The following work-related benefits are not considered to be fringe benefits:

  • a mobile phone or car phone used mainly for your employment
  • protective clothing required for your employment
  • a briefcase
  • a calculator
  • a tool of trade
  • an electronic diary or similar item, and
  • a notebook, laptop or similar portable computer (limited to one a year).

If the value of certain fringe benefits provided to you or your associate exceeds $1,000 in an FBT year (1 April to 31 March), your employer must record the grossed-up taxable value of those benefits on your payment summary for the corresponding income year (1 July to 30 June).

While the reportable fringe benefits amount on your payment summary needs to be shown on your tax return, you do not include it in your total income or loss amount, or pay income tax or Medicare levy on it. But the amount is used to determine your liability for a number of income tests for certain government benefits and obligations.

These include:

  • Medicare levy surcharge
  • deduction for personal superannuation contributions
  • government Super Co-contribution
  • tax offset for eligible spouse superannuation contributions
  • superannuation contributions and termination payments surcharge
  • Higher Education Contribution Scheme (HECS) and Higher Education Loan Programme (HELP) repayments
  • child support obligations, and
  • entitlement to certain income-tested government benefits.

For further information, please contact your accountant.

Copyright Commonwealth of Australia, 31 May 2005. http://ato.gov.au/businesses/content.asp?doc=/content/fbt_report_arrange_employees.htm&page=1

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.

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