Employee Benefits and FBT: What Does This Look Like in 2021?
When it comes to the different employee benefits and taxes, there is one type disliked because of its unwieldy nature: Fringe Benefit Tax. There is a seemingly endless amount of paperwork associated with fringe benefits, which have led so many employers to detest the process of filing taxes for it.
If you have not yet registered your business for FBT, it is important that you look into it especially if you currently offer benefits that fall under this category. To minimize confusion, here is a guide to help you figure out what to do in relation to this type of tax.
Employee Benefits and FBT:
The pandemic has forced a great many changes on people's lives. These changes, be they great or small, have had a profound impact on how FBT is filed. Here are a few things you need to know about filing your FBT this year:
What benefits are exempt from FBT?
As a general rule, if the item or service that is given as a benefit falls below $300 and is a one-off type of benefit, it will not be classed under FBT and will be considered exempt.
Another rule that exempts some benefits from being taxed under FBT states that if the item is provided for the employee to use for their job. Tools of the trade, bags to carry work items in and various types of electronic gadgets provided by the company are exempt from FBT.
How has the pandemic affected the filing of FBT?
The Australian Taxation Office Or ATO has amended its approach of FBT because of the many changes of work conditions brought about by the pandemic.
There are new benefits that have been newly created because of the pandemic. Since employers want to be able to offer more benefits to their employees that have been adversely affected by the pandemic, the ATO has come up with a more extensive list of benefits that will not need to be taxable under FBT.
Emergency assistance, health care benefits, company cars that will not be parked in the official place of work, and not-for-profit salary packaging are some of the benefits that will no longer need to be taxed under FBT as a result of the pandemic.
As a business owner, if you have any questions about FBT and the benefits that have been affected because of the COVID-19 pandemic, it is a good idea to approach your bookkeeper or accountant about these concerns. You may be interested in giving your employees extra benefits to help them cope with the changes brought about by the pandemic. A bookkeeper will be able to help you figure out if your company is financially sound and able to offer these benefits and if they will be exempt to FBT.
If you do not have a business accountant or bookkeeper to help you with this task, you can always find skilled accounting professionals at New Wave. We provide end-to-end accounting and bookkeeping services for small businesses. Contact us today and let us handle your books for you!