Fringe benefits

If your employees receive certain fringe benefits, you must include them in the wages you declare for payroll tax.

You must declare fringe benefits as defined by the Fringe Benefits Tax Assessment Act 1986 (FBTA Act).

Common examples include cars, housing costs, school fees, meals and entertainment.

The living-away-from-home allowance is considered a fringe benefit, so does not need to be declared separately.

Any exempt fringe benefits or fringe benefits with a nil value do not need to be declared.

There are 2 types of fringe benefits: type 1 and type 2. Type 2 fringe benefits attract a lower gross-up figure for income tax purposes than type 1 fringe benefits. The type 2 gross-up amount is used for payroll tax.

Declaring fringe benefits on your annual payroll tax reconciliation

You must combine the Type 1 and Type 2 benefit amounts. On your annual reconciliation, you must declare the total of theses combined benefits, grossed up by the type 2 gross-up rate.

If you declare your fringe benefits:

• on a month-to-month basis – add June fringe benefits to those monthly amounts, grossed up by the type 2 gross-up rate.
• using the alternative method – declare the type 1 and type 2 benefits on question 14 of your fringe benefits tax (FBT) return before lodging your annual reconciliation, grossed up by the type 2 gross-up rate.

If you report fringe benefits to the Australian Taxation Office, you must also report them to us.

Interstate employees

If you provide fringe benefits to employees in different states and territories, you must apportion fringe benefits across those states and territories.

For example, if you pay 60% of your wages in Victoria and 40% in South Australia, declare 60% of your grossed-up fringe benefits in Victoria and 40% in South Australia.

Revenue ruling

Revenue ruling PTA-003v2 provides more information to help you calculate fringe benefits for payroll tax purposes.

Rates

The FBT year runs from 1 April to 31 March.