FRINGE BENEFITS TAX (FBT)

The FBT year ended on 31 March 2024 and each employer is required to calculate their liability for FBT. Where a liability for FBT exists an annual return is required to be lodged and any tax paid by 21 May 2024. However, if the return is lodged electronically by a Tax Agent the due date of lodgement and payment is 25 June 2024.

In addition, there may still be specific COVID-19 related concessions available, some of which are noted below.

ALWAYS LODGE AN FBT RETURN

Where no FBT annual return is lodged the ATO has no time limit and can raise an FBT assessment at any time. Even if there is no FBT to pay we always recommend lodging an FBT return each year.

2024 FBT YEAR – RATES AND THRESHOLDS

	2025 rates	2024 rates	2023 rates
FBT rate	47%	47%	47%
Gross up rates - Type 1	2.0802	2.0802	2.0802
Gross up rates - Type 2	1.8868	1.8868	1.8868
Interest rate on loan fringe benefits	TBA	7.77%	4.52%
Car parking benefit threshold	TBA	$10.40/day	$9.72/day

2024 Living Away from Home Allowances:

ATO guidelines (excerpt) for reasonable food and drink within Australia:

$ Per week	One adult	Two adults	Three adults	One adult and one child	Two adults and one child	Two adults and two children
	316	474	632	395	553	632

ELECTRIC VEHICLE DISCOUNT

Probably the biggest recent change to FBT is in relation to electric vehicle discounts which allows an FBT exemption for electric cars (and their associated running expenses) that are used or made available to employees for private use provided the relevant requirements are met.

To be eligible for the FBT exemption:

• The employee receiving the benefit must be a current employee
• The car is a zero or low emission vehicle
• The value of the car at first retail sale must be less than the Luxury Car Threshold for fuel-efficient vehicles ($89,332 for 2023-24)
• The car must be first held for use on or after 1 July 2022

VEHICLES

We remind you that where motor vehicles are provided to employees or their associates for their private use, odometer readings must be recorded as at 31 March 2023 for each motor vehicle.

Guidelines for exempt vehicle benefits (i.e. commercial vehicles)

Many employers incorrectly believe that because these vehicles are "commercial" in nature, there is no FBT liability to consider. This is not the case. Even if a vehicle is on the ATO list of approved commercial vehicles, an FBT liability may still arise.

The ATO guidelines state that private use of these vehicles must be restricted to travel between home and work (and back) and that any diversion in travel must add no more than 2 km to the journey (e.g., picking up kids from school). In addition, the vehicle must not travel more than 1,000 km per year in private usage (e.g., holidays) and no single journey for private purposes can exceed 200 km. If the vehicle's private usage exceeds these guidelines, an FBT liability may arise.

Audit Spotlight

The latest ATO statistics estimate that there is an annual FBT tax gap of over 1 billion dollars, being the difference between the amount expected to be collected and the amount actually collected. The ATO has officially confirmed they have returned to a 'compliance enforcement' approach with particular focus on the following areas:

• Documentation and declarations – ensuring their completeness & validity
• Car parking benefits
• Car benefits, especially the calculation of taxable benefits and exemption requirements
• Expense payment benefits
• Employers providing entertainment to employees and claiming deductions in tax returns for entertainment expenses without reporting and paying FBT

Small business definition for FBT purposes

The $10m annual turnover threshold for certain small business concessions has increased to $50m. Eligible employers are now able to:

• Provide FBT-exempt car parking benefits on the employer's premises
• Provide multiple portable electronic devices for predominantly work-related purposes

If you have any queries in respect of your potential FBT liability or would like StewartBrown to perform an FBT 'health check' on your business, please contact one of the StewartBrown Managers or Partners to discuss.

Click here to download a PDF copy of the Stewartbrown 2024 FBT edition of our client newsletter.