Fringe benefits tax (FBT)

Fringe Benefits Tax (FBT) is a tax paid on certain benefits employers provide to their employees. FBT is separate from income tax and is based on the taxable value (cost) of the fringe benefits provided.  Employee remuneration that is not considered salary or wages is considered a fringe benefit.

Visit the Australian Taxation Office (ATO) for detailed information including the current FBT rate.

When FBT applies

Examples of fringe benefits our staff may receive include:

  • use of a University owned vehicle for private purposes
  • reimbursement of personal expenses, such as personal telephone costs
  • entertainment on or off premises including:
    • food, drink or recreation
    • social functions, including Christmas parties, staff retreats and farewells
    • business lunch off premises
    • a sit down meal while attending training or seminar that is less than four hours
  • living away from home allowances.
  • payment of personal travel costs, which usually occurs when the University pays for airline fares and travel insurance on a travel event that includes personal activities, such as a holiday
  • housing

Check our FBT forms if you receive any of these benefits. For definitions and examples of these fringe benefits, consult the Australian Taxation Office (ATO).

When FBT doesn't apply

Examples where fringe benefits doesn't apply for staff include:

  • work related items such as mobile phones, laptops and computers are usually exempt from FBT
  • private travel that is minor or infrequent may be also be exempt. For example, if you use a pool vehicle to travel home for the purpose of undertaking a business journey the following morning
  • benefits that are not directly related to your job are not fringe benefits. Examples include a Fitness Passport or Library membership
  • graduation ceremonies
  • entertainment including:
    • light meals in the workplace
    • business meeting on premises
    • a sit down meal while attending training/seminar that is longer than four hours

Consult the Australian Taxation Office (ATO) for a complete definition and examples.

Who pays FBT

The University pays FBT. Staff who are eligible for fringe benefits may choose to take a benefit (which is not subject to income tax) instead of being paid the equivalent value in their salary. This method is called salary sacrifice.

Salary sacrifice can sometimes be used to reduce a person's taxable income. However, the reduction in salary may end up being more than if you had bought the item from your after-tax salary. The equivalent value of salary that you forgo is calculated using the cost of the benefit and the FBT the University pays.

FBT also applies to benefits outside of salary sacrifice such as payment for personal travel costs.

FBT and travel

FBT is applicable when the private portion of the trip is 50% or greater, i.e. the primary purpose of the trip is deemed to be not for business.  The University does not want to incur FBT for these circumstances.

To eliminate FBT, where the travel request gives rise to an FBT liability, the traveller must do the following before they travel:

  • Amend the proposed travel request by reducing the private days to less than 50%; or
  • Personally pay for the private portion of the flight cost directly to the Travel Management Company at the time of the booking and the University pays the balance, which is the business portion

Where, on completion of travel, the primary purpose of the trip is deemed to be not for business, i.e. 50% or less for business, the traveller must:

  • Send the completed travel diary to finserv-taxation@newcastle.edu.au for the assessment of FBT liability
  • Commit to pay the full FBT liability within 14 days of returning from the trip.

Reportable FBT and your tax

If you receive fringe benefits with a taxable value of more than $2,000, we are required to report the amount on your payment summary under the heading 'reportable fringe benefits'.

The reportable fringe benefit amount is not calculated towards your taxable income, however it is included in income tests for:

  • Higher Education Loan Program (HELP) repayments.
  • Student Financial Supplement Scheme (SFSS) repayments.
  • Medicare levy surcharge.
  • Super co-contribution.
  • Child care benefit and family assistance payments

Consult the Australian Taxation Office (ATO) for more information including how taxable value is calculated.

FBT forms and record keeping

Motor vehicles

Personal expenses

Complete an expense payment declaration form (PDF, 208KB) stating how much of the expense is related to work. This needs to be expressed as a percentage and anything stated as less than 100 per cent will be subject to FBT.

Resources

See the Purchasing Card Policy and Procedures for further information on FBT.

See the FBT entertainment checklist (PDF, 122KB) to see which entertainment categories are or aren't subject to FBT.