Fringe benefits means a fringe benefit as defined in the Fringe Benefits Tax Assessment Act 1986 (Cwlth) (the FBT Act) but does not include:
- car parking fringe benefits, unless you assign a defined amount to the benefit (e.g. car parking instead of salary to the value of $2,000)
- tax-exempt body entertainment fringe benefits.
If you provide benefits to your employees that are not fringe benefits, we will decide if they are taxable by looking at the:
- nature of the benefits
- circumstances in which they are provided to the employee.
Calculating fringe benefits
Under the FBT Act, fringe benefits are divided into two types—Type 1 and Type 2—depending on whether or not the employer can claim a GST input tax credit. To calculate the 'grossed-up value' of the fringe benefits for payroll tax, add the Type 1 and Type 2 aggregate amounts (before grossing up) used in the fringe benefits tax return, and then multiply this total by the Type 2 gross-up factor.
(Type 1 aggregate amount + Type 2 aggregate amount) X Type 2 gross-up factor
= Grossed-up value
Payroll tax must be paid on the grossed-up value of the fringe benefit.
Any amended FBT assessments you receive will affect your payroll tax liability.
The taxable wage value of any benefits that are not fringe benefits is the higher of the value:
- we determine for these benefits
- agreed between you and the employee.
Estimating fringe benefits
You can use estimated FBT figures for payroll tax if:
- the estimate is based on the previous year’s fringe benefits taxable amounts
- you have been liable for FBT for 15 months.
You must then adjust this against the actual FBT amount in your annual return. As the FBT year ends on 31 March and the payroll tax financial year ends on 30 June, you will need to reconcile the fringe benefit values for April, May and June in the following financial year’s annual return.
Example
An employer used estimated fringe benefit figures to work out its payroll tax each month from July 2008 to June 2009. The estimated figure of $3,000 per month was 1/12 of the total FBT taxable amount of $36,000 for the previous FBT year ending 31 March 2008. The FBT taxable amount is based on a Type 2 gross-up factor from that FBT year.
In July 2009, the employer must:
- include the FBT taxable amount of Queensland fringe benefits for the year ending 31 March 2009 ($42,000) in its annual return
- calculate payroll tax with the $42,000 included as taxable wages
- pay any tax shortfall for the year when lodging the annual return.
If you use actual figures in your periodic returns throughout the year, the FBT amounts should already match. You only reconcile when you use estimated figures for all or part of a financial year.
See Public Ruling PTA003—Fringe benefits for more information.
