Chapter 16

Living on the Fringe: Fringe Benefits Tax

In This Chapter

arrow Understanding FBT

arrow Doing the FBT maths

arrow Working out a car’s FBT

arrow Choosing how you want to be paid

P rior to the introduction of the fringe benefits tax (FBT) provisions, you were able to structure your pay packet in such a way that significantly reduced the burden of tax. You could also receive non-cash benefits in lieu of a cash salary or wage, or transfer those benefits to family members. Legislation was introduced in 1986 to put everyone back on an even playing field (subject to certain limited exceptions).

In this chapter, I explain what FBT is all about and how to calculate it, including specific info for cars and salary packaging.

Coming to Terms with FBT

The Fringe Benefits Tax Assessment Act 1986 (FBT Act) was introduced to overcome the inability to tax certain benefits paid to employees (or their associates such as a spouse, child or relative) in lieu of receiving a salary or wage. The employer rather than the employee is liable to pay FBT on certain benefits provided to employees (for example, provision ...

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