Fringe Benefits Tax
) is a tax applied within the Australian tax system
by the Australian Taxation Office
. The tax is levied on most non-cash benefits that an employer provides "in respect of employment." The tax is levied on the employer, not the employee and will be levied irrespective of whether the benefit is provided directly to the employee or to an associate of the employee.
The tax was first imposed in 1986 and the operation of the tax is described by the Fringe benefits Tax Assessment Act 1986.
A fringe benefit is a benefit in respect of employment - a benefit provided to somebody because they are an employee. The 'employee' may be a current, former or future employee, and treatment of the benefit will be the same whether it is received directly by the employee or by an associate of the employee.
There are several specific 'types' of benefits listed with the legislation, including car fringe benefits, loan fringe benefits, housing fringe benefits and others. For each fringe benefit type, one or more methods is prescribed for determining the taxable value
of the benefit.
Calculation of the tax payable
FBT is paid by the employer at a rate of 46.5%, which represents the highest marginal income tax rate (45%), plus the Medicare Levy (1.5%). This rate is applied to the "grossed up" taxable value less any contribution by the employee.
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