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

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

When it is not practical for an employer to calculate the actual taxable value of fringe benefits for each periodic return, the Commissioner has the discretion to allow the employer to use a resonable estimate instead. 

A common approach is to use 1/12th of the taxable value of the fringe benefits declared in the employer's most recent annual fringe benefits tax return as the monthly estimate. 

However, employers must report the actual taxable value of fringe benefits, consistent with their annual fringe benefits tax return, when lodging their annual adjustment return.

Example 

An employer declares $1 000 of fringe benefits in each monthly return from July 2025 to May 2026 (based on the 2025 annual fringe benefits tax return $12 000 / 12). The 2026 annual fringe benfits tax return includes taxable benefits of $24 000 for that year.

The employer should declare $24 000 in their 2025-26 Annual Adjustment Return.

 Fringe Benefits Tax returns:

FBT year ended 31 March 2025 –  

Taxable value:                                                                $12 000

FBT year ended 31 March 2026 –  

Taxable value:                                                                $24 000

​​

Payroll tax returns for the year ended 30 June 2026:  

July 2025 to May 2026 ($1 000 / month)                        $11 000

June 2026 Annual Adjustment Return                            $24 000 

 

Undeclared taxable value of fringe benefits for the 2025-26 financial year:

2026 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 2025-26 financial year in addition to the monthly payroll tax already paid between July 2025 and May 2026 inclusive. ​

When a component of wages falls under more than one section of the payroll tax wages definition, it should be declared only when calculating total wages. 

This overlap may occur with fringe benefits which may meet the definition of wages, as:

• a fringe benefit, or 
• wages paid in kind.  

In these situations, the value used for payroll tax purposes is the value determined under the Fringe Benefits Tax Assessment Act 1986.​​​​​​​​ (Cth).

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

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