Fringe benefits

​​​​​ ​​​​​​​The definition of wages includes a payment for services “whether paid or payable in cash or in kind” and includes the value of fringe benefits provided to employees.
 

For the purpose of the Payroll Tax Act 2008, a fringe benefit means a fringe benefit under the Fringe Benefits Tax Assessment Act 1986

The type 1 and type 2 benefits amounts and factors referred to below are defined in the Fringe Benefits Tax Assessment Act 1986.

Refer to the payroll tax Fringe benefits​ ruling.​ ​

​​ ​​​

The definition of ‘fringe benefit’ for the purpose of the Payroll Tax Act 2008 does not include:

 (a) a tax-exempt body entertainment fringe benefit within the meaning of the Fringe Benefits Tax Assessment Act 1986; or

 (b) any payment or benefit, which may be prescribed by regulation under the Act not to be a fringe benefit. 

 Exempt fringe benefits or fringe benefits with a nil taxable value will not be subject to payroll tax, that is, they will have a   nil value for payroll tax purposes.​

The taxable value of fringe benefit amounts should be calculated by adding the pre-grossed aggregate fringe benefits   taxable amounts and then applying the lower, type 2 factor to determine the grossed-up taxable amount.

Refer to the Australian Taxation Office website for the current rates. 

 Example: (this example is using an earlier year’s rate)

 Type 1 aggregate fringe benefits amount                                                                $2 000

 Type 2 aggregate fringe benefits amount                                                                $3 000

 Total Type 1 & 2 aggregate fringe benefits amount (pre-grossed)                          $5 000

 The payroll taxable fringe benefits amount is: $5 000 x 1.9608 =                           $9 804

 The same records of calculation are acceptable for both fringe benefits tax and payroll tax purposes. ​​​


Where it is not practical to calculate the actual taxable value of the fringe benefits for inclusion on the periodic return, the Commissioner has the discretion to accept an estimate of the value of those benefits. 

For example, a reasonable monthly estimate would be 1/12th of the taxable value of the benefits declared in the        employer's latest annual fringe benefits tax return. 

Employers must include the actual taxable value of fringe benefits declared in their annual fringe benefits tax return on their annual adjustment return.

Example: 

An employer declares $1 000 of fringe benefits in each monthly return from July 2017 to May 2018 (based on the 2017       annual fringe benefits tax return $12 000 / 12). The 2017 annual fringe benfits tax return includes taxable benefits of $24 000 for that year.

The employer should declare $24 000 in their 2017-18 Annual Adjustment Return.

 Fringe Benefits Tax returns:

FBT year ended 31 March 2017 –  
Taxable value:                                                                $12 000
FBT year ended 31 March 2017 –  
Taxable value:                                                                $24 000
​​
Payroll tax returns for the year ended 30 June 2018:  
July 2017 to May 2018 ($1 000 / month)                        $11 000
June 2018 Annual Adjustment Return                            $24 000 

 
Undeclared taxable value of fringe benefits for the 2017-18 financial year:
2018 taxable value                                                         $24 000
Less: already declared                                                    $11 000
Balance                                                                           $13 000​

​Therefore, payroll tax will be payable on the balance of $13 000 for the 2017-18 financial year in addition to the monthly    payroll tax already paid between July 2017 and May 2018 inclusive. ​


An employer who ceases to be an employer during a financial year must advise us of their final fringe benefits tax liability calculated at the end of the fringe benefits tax year. This may lead to an adjustment of the amount of fringe benefits previously declared for the period during which the business was an employer.

An employer who commences being an employer during a financial year, and who has not yet lodged an annual fringe benefits tax return, may calculate the taxable value of fringe benefits declared in monthly payroll tax returns based on:
  • the actual value of benefits provided for that month; or 
  • a reasonable estimate of the final fringe benefits tax liability allocated over each month remaining of that financial year. ​​​​​​​


Where a component of wages is covered by two or more sections of the payroll tax wages definition, it should only be declared once in the calculation of total wages. 

In particular, this situation may occur with fringe benefits where the benefit may fit the definition of wages, as a fringe benefit, or as wages paid in kind.  In such cases the value for payroll tax purposes is the value determined in accordance with the Fringe Benefits Tax Assessment Act 1986.​​​​​​​​

​ 

Salary that is sacrificed to obtain exempt or excluded benefit under the Fringe Benefits Tax Assessment Act 1986 is not to be included as taxable wages for payroll tax purposes.

The Commissioner of State Revenue will adopt all Taxation Rulings and Determinations issued by the Commonwealth Commissioner of Taxation in relation to fringe benefits.

If an Australian Taxation Office audit results in the issue of an amended fringe benefits tax assessment, you must amend your annual adjustment return via Tasmanian Revenue Online​.​ 

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