Fringe benefits tax is levied on the employer, not the employee, for benefits provided in place of or in addition to salary. It exists so that non-cash remuneration is not a way of avoiding income tax.
What tends to attract it
- Private use of a company vehicle
- Car parking in some circumstances
- Entertainment, including meals and events
- Low-interest or interest-free loans to employees
- Payment or reimbursement of private expenses
Its own year and its own return
The FBT year runs from 1 April to 31 March, which does not align with the Australian income tax year ending 30 June. It has a separate return and separate deadlines. Certain employers, including some not-for-profits, have concessions and exemption caps, and specific exemptions apply to items such as portable work devices and, currently, some electric vehicles.
Why it matters when hiring internationally
Companies importing a benefits package from another country routinely trigger FBT without expecting it. A perk that is tax-neutral elsewhere can carry a material employer tax in Australia, and the rate is set with reference to the top marginal rate rather than being nominal. It is worth pricing benefits for Australian staff specifically rather than assuming a global package translates.