The fringe benefit taxes are those paid by an employer on behalf of his employ, So that the employ won’t have to pay the salary taxes. The employer pays full amount or a portion of tax amount for his employ for their taxable salaries.
The fringe benefit can be in form of paper money as well as other settlements. Employer can give a car or any other vehicle to his employ for personal use. Company can give loan to worker on abridged interest rates. Worker can ask for company to get him out of debt. A house can be given to employee from a company. Give a home allowance to those employ that have come from any other city and such. Supplies can be given to employee on less price than market. Employer can also give food or beverages to employ or else arrange a salary package with them.
Fringe benefit is not included in income tax. It applies on personal marginal rates of income tax including Medicare levy. If employer is providing FBT, than he can ask for deduction on his income tax. If the value of reportable FBT for an employee is more than 2000 dollar, then company will have to divulge price on recruit’s payment synopsis.
In some companies employee sacrifice some amount of their salary to get it back after their retirement that is called superannuation fund. These funds are not fringe benefits. On the other hand if employer gives these funds to employee’s associate so it can be fringe benefits.
There are some ways through which fringe benefits can be excused. It is important for companies to be sure that they are fulfilling all the requirement for FBT exempts. In general these types of benefits are not income tax related. These are in the hand of employ.
There are some items by using them company can get fbt exempts benefits. by using mobile for, by giving laptop or notebook to your employee at least one per year. Other than that printer, computer software, electronic diary, shielding clothes for work use, briefcase and similar items can get employer a FBT exempt benefit.
The FBT benefit can be shared with other coworkers. For example if a holiday package has been given to an employee as FBT and he wants to share it with another employee so payment will be divided into two persons (i.e. if amount is $5000 then there will be $2500 for each employee).
If an employee wants to show less amount of FBT on you payment summery so he could ask his employer to swap it with cash salary. Or he can make contribution and get benefits from contributed amount.
This is not included in assembled income of an employee but that will affect some of income tests such as the Medicare Ivey surcharge, deduction of personal super contribution, the super co-contribution, the mature age worker tax offset, child support obligation and such as.
As a result, fringe benefit is good for both employer and employee. It is tax effective for employers business and helpful for worker and keeps him pleased.