Fringe Benefits Tax Assessment Act 1986

Fringe Benefits Tax Assessment Act 1986

What is this law about?

This is the main law that governs Fringe Benefits Tax (FBT) in Australia. FBT is a tax that employers (not employees) pay when they provide non-cash perks or benefits to their workers as part of their employment. Think of things like a company car, cheap loans from your employer, free or discounted accommodation, or having your personal expenses paid for — these are "fringe benefits."

Who does it affect?

• Employers are the primary target — they are legally responsible for calculating and paying FBT on benefits they give to staff
• Employees are indirectly affected because the type and value of benefits they receive determines how much tax their employer pays, which can influence what benefits employers are willing to offer
• Associates of employees (like family members) can also trigger FBT obligations if benefits flow to them

What does it actually do?

The Act sets out in detail:

1. What counts as a fringe benefit — cars made available for private use, cheap or interest-free loans, paying an employee's personal bills, providing housing, writing off debts the employee owes, and many more
2. How to calculate the taxable value of each type of benefit (using specific formulas for each category)