What is FBT?
Fringe benefits tax (FBT) is a tax payable by employers who provide fringe benefits to their employees or to associates of their employees.
Fringe benefits may be rights, privileges or services. For example, a fringe benefit is provided when an employer:
Allows an employee to use a work car for private purposes
Pays an employee’s green fees at golf days.
FBT may apply when non-profit organisations provide benefits to their employees, but certain FBT concessions can reduce the organisation’s liability.
Non-profit organisations are only liable to pay FBT on benefits provided to an employee or an associate of an employee in respect of their employment. It is important therefore to determine the status of the people involved in the operations of your organisation. Many will be volunteers, some will be contractors and some will be employees.
A genuine volunteer does not work under a contractual obligation for remuneration and would not be an employee or an independent contractor.
For the purposes of FBT, an employee is a person who receives (or is entitled to receive) salary or wages, or a benefit provided in respect of their employment.
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