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Taxation

Fringe Benefits Tax (FBT)

Contents of this page

Introduction
1.0 Hospitality Expenditure
2.0 Motor Vehicles
3.0 Fee Reimbursement
4.0 FBT Rates

Introduction

The University is generally obliged to pay Fringe Benefits Tax (FBT) on the cost of benefits provided free of charge to its employees. Any FBT incurred will be charged to the faculty/school which provided the benefit.

Every effort is to be made to minimise the University's FBT liability.

The following specific matters should be noted:

1.0 Hospitality Expenditure

The following is a summary of the FBT liability on hospitality expenditure:-

1.1 Employees

FBT applies to all employees on all occasions where food and drink is provided except:

1.1.1 where it is consumed at a meeting, etc. at the University Club, provided the meeting is related to the business of the University; OR

1.1.2 where it consists of morning and afternoon teas or light lunches (ie: sandwiches, finger foods or a two course meal with a moderate amount of alcohol), OR

1.1.3 where it is consumed while attending a CPD seminar, training seminar, conference, etc. which has a duration of not less than 4 hours, OR

1.1.4 where it is consumed while on official travel away from the University

(For further information refer to the Hospitality Policy & Procedures)

1.2 Visitors

FBT does not apply to food and drink provided to visitors at any time

It should be noted that exemption from FBT in respect of relatives of employees or infrequent entertainment is not available.

It is important that the correct expense detail codes be used at all times when incurring entertainment (hospitality) expenditure:

1.2.1 expense detail code 5271 - Hospitality - not subject to Fringe Benefits Tax

1.2.2 expense detail code 5722 - Hospitality - subject to Fringe Benefits Tax

(For further information refer to the Hospitality Policy & Procedures)

2.0 Motor Vehicles

2.1 University employees are not permitted to use University faculty or pool motor vehicles for private purposes, or to take them to their place of residence for overnight parking or garaging, as this would make the University liable for payment of Fringe Benefits Tax.

2.2 Payment of FBT does not apply, however, when a University vehicle is taken to an employee's place of residence overnight for the specific purpose of commencing a business journey early the next morning.

2.3 Heads of Departments are to ensure that University vehicles are not used for private purposes or garaged or parked at employees' place of residence except as outlined in the preceding paragraph.

(For further information contact the Finance Officer, Taxation ext. 5130)

3.0 Fee Reimbursement

3.1 FBT applies to any reimbursement of HECS fees paid to staff.

3.2 GSC and other course fees are exempt from FBT as long as the staff member could have claimed the expense as an income tax deduction.

4.0 FBT Rates

4.1 For any transaction subject to FBT, the current effective tax rates are:

94.175% for transactions where no GST input tax credits can be claimed, and

103.2657% where GST input tax credits can be claimed.

This additional cost will be charged to a faculty in the month following the taxable transaction.

(For further information contact the Finance Officer, Taxation ext. 5130)