FBT Articles

Fringe Benefits Tax FBT FBT was introduced into Australia in 1986 by the Fringe Benefits Tax Assessment Act 1986 (“FBT Act”).  It provides that where a benefit is provided by an employer to an employee (or associate) in respect of his or her employment, the employer (not the employee) must pay tax of 47% on the benefit. As a general rule, the cost incurred in providing a fringe benefit and the amount of FBT paid is deductible to the employer.  A fringe benefit is exempt income in the hands of...

Salary Packaging - Salary Sacrifice Salary packaging, also referred to as salary sacrifice, involves an employee sacrificing part of his or her salary in return for benefits (e.g. taking a salary of $120,000 plus a motor vehicle and superannuation and other benefits as opposed to taking a salary of $200,000). If the salary sacrifice is regarded as effective by the Australian Taxation Office (ATO), the employer will pay FBT (Fringe Benefits Tax) of 47% on the benefits and they will be exempt...

Car Salary Packaging Car salary packaging (salary sacrificing) will not always save you money, despite what salary packaging firms would have you believe. In fact in some circumstances it can cost substantially more than buying a car in your own name. For example, we reviewed a quote from a salary packaging firm for our client. The quote promised over $7,000 in savings over a 3 year period. We prepared calculations that showed she would save much more than that by buying the car in her own...