Fringe Benefits: What Are They and How They Benefit You
A Fringe Benefit is a ‘payment’ to an employee, but in a different form to salary or wages.
Such as allowing an employee to use a work car for private purposes, reimbursing an expense incurred by an employee such as school or education fees. Rewarding your employees beyond their usual salaries is a great way to show your appreciation for a job well done. How an employer calculates and reports the taxable value of fringe benefits depends on the type of benefit provided.
Keeping track of these assets and how they are used will help you meet your FBT obligations and to determine any related income tax deductions you are able to claim come tax time.
For a full list of the types of fringe benefits you can offer your employees check out the ATO Website here.
Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits.
One of my employees wants to salary sacrifice to their super, is this a Fringe Benefit? How does this affect my business?
Salary sacrificing (sometimes called salary packaging or total remuneration packaging) allows employees to forgo part of their salary or wages in return for benefits of a similar value. Most common includes sacrificed super contributions to a complying superfund, so what are the implications to you as an employer?
A salary sacrifice arrangement made to a complying superfund are not considered a fringe benefit for tax purposes. If you are considering such arrangement speak to one of our chartered accountant experts today about your options.
From start-ups to well established corporations we’ve got you covered to help you gain confidence and clarity over your business finances, get in touch with one of our business advisory experts today.
Ph: (03) 8393 1450