FBT 2023 and hybrid workforces with JTU Accounting Group

Will your hybrid workforce leave you with a FBT bill?

What every employer should know about FBT in 2023

Make sense of FBT in 2023 as covid exemptions end and work from home adds new challenges to your compliance.

Getting FBT right? It’s complicated.

March 31st marks the end of the Fringe Benefits Tax (FBT) year.

If FBT has you scratching your head, you’re not alone. The ATO admits it's complex, saying, “We recognise complexity in the FBT law can hamper employers’ engagement with the system. Moreover, in 2023, possible changes to covid-related exemptions for remote workforces may add another layer of complexity. In this article, we get you up to speed to ensure your hybrid workforce is FBT compliant.

Fringe benefits tax (FBT) is a tax paid by employers on certain benefits provided to their employees, their families, or other associates. Separate from income tax, it's calculated on the taxable value of the fringe benefit. As an employer, you must self-assess your FBT liability from April 1st to March 31st.

Covid and FBT 2023

When covid lockdowns hit, business owners scrambled to set up hybrid workforces. You may have acted quickly to provide your employees with work from home benefits without considering the FBT implications.

FBT in 2023 will be even more complex – with some covid exemptions possibly changing or ending on March 31st. Get the ATO’s rundown on covid and FBT here.

The FBT gap

The ATO has recently announced the ‘FBT gap’ is over $1 billion. Employers will be targeted to ensure those liable for FBT are lodging and paying the right amount. 
Planned action to reduce the gap includes:
  • gathering industry insights to inform areas of focus
  • working with industry groups to promote education strategies
  • providing public guidance to assist employers
  • targeted risk-based reviews and audits.

FBT for employers with remote or hybrid workforces

Which benefits are exempt from FBT, and which are liable for the tax?

Laptops, printers, smartphones, other portable electronic devices and tools of trade
Exempt from FBT if they are primarily used for work-related purposes. Note: desktop computers are not considered portable electronic devices.
General office equipment including desks, chairs, cabinets, monitors and stationery
If you LENT office equipment during temporary WFH arrangements, office equipment is likely exempt from FBT. For ongoing WFH arrangements, the benefit may also be exempt, or the taxable value may be reduced by the otherwise deductible rule (ODR).
If you have GIVEN office equipment with a taxable value of less than $300, the item is likely exempt from FBT, or the ODR may reduce its taxable value. For equipment $300 or more, FBT is likely payable.
Phone and internet access
The minor benefits exemption (which applies to benefits under $300) or the ODR may apply if you pay for your employee’s phone and internet access.
Counselling and healthcare that supports WFH
Counselling services or healthcare provided to support employees working from home may be exempt from FBT per the existing rules for work-related counselling. Covering concerns such as health and safety, stress management, relationships, retirement, and physical health including dentistry, optometry, and more, work-related counselling seeks to improve or maintain the quality of your employees’ work performance.
Also exempt from FBT are car benefits, expense payment benefits or property benefits associated with work-related preventative health care. For example, a sit-stand desk purchased to prevent or manage back pain.
Note: exemptions require the recommendation of a legally qualified medical practitioner or nurse.

Other benefits liable for FBT

Other benefits liable for FBT include:

  • allowing an employee to use a work car for private purposes – including any parking
  • gym memberships
  • entertainment such as free tickets to concerts
  • food and drink
  • providing a discounted loan
  • giving benefits under a salary sacrifice arrangement.

Get across the details here.

Ask your accountant about FBT

Your accountant can help you sift through the murky waters of FBT to ensure you remain compliant. Schedule an FBT catch up with your accountant and ask:
  • Should I be registered for FBT?
  • What FBT records do I need to keep?
  • How do I calculate my FBT?
  • Do I have to lodge an FBT Return even if no FBT is payable?
  • How can I reduce my FBT liability?
  • What are the key things I must do by March 31st 2023?

Don’t go it alone

A trusted accountant can help with staying compliant while reducing your FBT liability. Save yourself time, frustration and risk and get professional help to manage your FBT return.

Nail your FBT and avoid costly mistakes with expert accounting advice.