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2015-16 Legislative Updates: Fringe Benefits Tax (FBT)

Posted by: on 9 July 2015 in Compliance, Legislation, Multinational & Globalization, Payroll, Superannuation

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It has been an anxious few weeks holding out for some key legislative measures to be passed for the financial year commencing on 1 July 2015.

Even still, some of the measures from the Federal Budget have not as yet been passed and the clock is ticking down towards the end of financial year.

ADP has summarised some of the key tax and legislative measures below to help you keep track and plan for the 2015-16 year:

Thankfully, the 2015-16 Federal Budget did not hit FBT as hard as the preceding two budgets did with the changes to the Living Away From Home Allowance (LAFHA) and to the statutory formula rates which had significant impact on the FBT returns of many businesses (in both dollar value and increased administration).

  1. FBT tax and gross-up rates

Due to changes to the marginal rates, the FBT tax rates and gross-up factors will also fluctuate with the marginal rate changes, most significantly, the impact of the Temporary Budget Repair Levy.

FBT Year Tax Rate Type 1 gross-up Type 2 gross-up
Ending 31 March 2016 and 31 March 2017 49% 2.1463 1.9608
Ending 31 March 2018 and onwards 47% 2.0802 1.8868

Please note the increase in Type 2 factor for the FBT year ended 31 March 2016 as it is the gross-up factor that applies when calculating the employee’s Reportable Fringe Benefit Amount (RFBA).

  1. Caps for FBT exempt and rebateable employers
Employer Concession Cap year ending 31 March 2016 and 31 March 2017 Concession Cap for the year ending 31 March 2018 and ongoing
Public benevolent institution other than a public hospital $31,177 $30,000
Public hospitals, non-profit hospitals and public ambulance services $17,667 $17,000
Rebateable employers – certain registered charities, non-government and
non-profit organisations
Rebate of 49% capped at $31,177 Rebate of 47% capped at $30,000

Note: As part of the 2015-16 Federal Budget, Treasurer Joe Hockey announced the intention to introduce another cap for the aforementioned employers being a $5,000 cap on meal entertainment benefits (as well as them being reportable fringe benefits). At the time of writing this update, this measure has not been legislated.

These legislative updates are current at the time of publishing, however please be aware that there are a number of Bills before Parliament as well as the White Paper on the Reform of Australia’s Tax System being undertaken that may impact you also.

We will endeavour to keep you updated on key changes as the information becomes available.

Written by:  Angela Lehmann

Originally published July 9 2015

 

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