FBT is separate from income tax. It is a tax paid on certain benefits provided to employees or employees' associates, because of the employee's employment. Employees' associates are typically their family members.
What a fringe benefit is
A fringe benefit is a benefit provided to an employee (or their associate) because that person is an employee. Benefits can also be provided by a third party under an arrangement with the employer. An employee can be a current, future or former employee.
If you are a director and run your business through a company, you may be regarded as an employee of that company. This may mean that fringe benefits provided to yourself result in your company having FBT obligations.
Examples of fringe benefits include:
- allowing an employee to use a work car or other vehicle for the employee's own private purposes (including taking the car home overnight)
- giving an employee a cheap or interest free loan
- paying an employee's private health insurance, children's school fees or giving them tickets to sporting events or other entertainment.
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