Fringe Benefits Tax (FBT) Policy
This Policy provides guidance for ensuring compliance with Fringe Benefits Tax (FBT) legislation.
The FBT Policy applies to all staff of CIT including former employees and as applicable, associates and third parties.
3.1. FBT is a tax payable by employers for benefits paid to an employee or an employee's associate (e.g. a family member) in place of salary or wages. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.
3.2. FBT is payable by CIT, not employees, to the Australian Taxation Office (ATO).
3.3. The FBT year is 1 April to 31 March.
3.4. Benefits provided that will create an FBT obligation include:
- provision of cars;
- provision of car parking;
- provision of items of property including clothing (uniforms and clothing relating to work is exempt from FBT);
- payments or reimbursements of various expenses;
- payments or reimbursements for private mobile phones;
- provision of housing and accommodation;
- payment of living away from home allowances;
- provision of hospitality, meal entertainment and/or tax-exempt body entertainment;
- payment or reimbursement of HECS or HELP; and
- various salary packaged benefits.
3.5. Certain items are not deemed to be a fringe benefit and include:
- salary, wages and allowances made through the payroll system (except Living-Away-From-Home Allowances);
- contributions made to a complying superannuation fund;
- eligible termination payments; and
- benefits which are exempt under FBT legislation.
3.6. By virtue of the nature of CIT's operations, exemptions apply. An example that applies to CIT is an exemption from the FBT associated with the provision of car parking.
3.7. All employees who receive benefits with an aggregate taxable value of $2,000 or over excluding meal entertainment benefits must have the reportable fringe benefits amount (RFBA) included on their annual Payment Summary.
3.8. The RFBA does not create a direct financial liability to the ATO however is utilised by various government departments to determine entitlements to government provided benefits, for calculation of child support entitlements, to calculate the applicable superannuation surcharge as well as to calculate other obligations.
3.9. Other benefits may result in nil tax under the FBT legislation where the otherwise deductible rule operates, or where a contribution to the FBT is made by an individual.
3.10. Some CIT travel expenditure is subject to FBT legislation. Certain travel is deemed under FBT legislation to be private unless certain substantiation and declaration requirements are complied with. Therefore, a Travel Diary (as defined under the FBT legislation) may be required however if a business unit declares that the travel is work related, it is exempted from FBT such as would be the case for a study tour or work related conference. In these instances, a travel diary is not required.
3.11. Non-compliance with the procedures may result in the application of penalties for CIT by the ATO.
- Financial Management Act 1996
- Finance Policy (CIT)
- Fringe Benefits Tax Guide ATO
- Financial Delegations Schedule (internal access only)
- ACT Government Salary Packaging Manual
All terminology used in this policy is consistent with definitions in the CIT Policy Glossary.
6. Policy Contact Officer
For more information or for queries that are unable to be addressed through regular channels, please contact a Business Support Manager, Financial Services or the Senior Director, Finance.
Contact CIT Student Services on (02) 6207 3188 or email firstname.lastname@example.org.
This policy is implemented through the associated procedures. Authority to make changes to the procedures rests with the policy owner.
Policy No: 2019/1889
Approved: August 2019
Next Review: August 2021
Category: Corporate Policies
Policy Owner: Executive Director, Corporate Services
| Fringe Benefits Tax FBT Procedures|
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