How to calculate your FBT

You must self-assess your fringe benefits tax (FBT) payable when you lodge your FBT return at the end of each FBT year (beginning 1 April and ending 31 March).

When working out your FBT liability you must gross-up the taxable value of benefits you provide, to reflect the gross salary employees would have to earn at the highest marginal tax rate (including Medicare levy) to buy the benefits after paying tax.

There are two separate gross-up rates used to calculate fringe benefits taxable amounts:
  • higher gross-up rate (type 1) is used where you (or other benefit providers) are entitled to a GST credit for GST paid on benefits provided to an employee. These benefits are known as GST-creditable benefits.
  • lower gross-up rate (type 2) is used where there is no entitlement to a GST credit. 
The tax payable is the fringe benefits taxable amount multiplied by the FBT rate.

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