Part I
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Commonwealth act
The Fringe Benefits Tax Assessment Act 1986 makes employers — not employees — liable for tax on non-cash perks provided to staff (cars, loans, housing, paid personal expenses, etc.). It defines what counts as a fringe benefit, how to value and gross-up benefits, and lists exemptions and concessions for certain employers. It matters because it shapes salary packaging, affects the cost of workplace perks, and is enforced by the ATO.
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Direct links to the current provisions in Fringe Benefits Tax Assessment Act 1986.
This Act may be cited as the Fringe Benefits Tax Assessment Act 1986.
This Act shall come into operation on the day on which it receives the Royal Assent.
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
(1) This Act extends to every external Territory referred to in the definition of Australia. (2) Except so far as the contrary intention appears, this Act extends to acts, omissions, matters and things outside Australia, whether or not in a foreign country. (3) Except where otherwise expressly provided, this Act extends to matters and things whether occurring before or after the commencement of this Act. (4) This Act binds the Crown in each of its capacities.
The Commissioner has the general administration of this Act.
Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.
(1) The Commissioner shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the working of this Act, including any breaches or evasions of this Act of which the Commissioner has notice. (2) The Minister shall cause a copy of a report furnished under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report. (3) For the purposes of section 34C of the Acts Interpretation Act 1901, a report that is required by subsection (1) to be furnished as soon as practicable after 30 June in a year shall be taken to be a periodic report relating to the working of this Act during the year ending on that 30 June.
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
This Act may be cited as the Fringe Benefits Tax Assessment Act 1986.
This Act shall come into operation on the day on which it receives the Royal Assent.
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
(1) This Act extends to every external Territory referred to in the definition of Australia. (2) Except so far as the contrary intention appears, this Act extends to acts, omissions, matters and things outside Australia, whether or not in a foreign country. (3) Except where otherwise expressly provided, this Act extends to matters and things whether occurring before or after the commencement of this Act. (4) This Act binds the Crown in each of its capacities.
The Commissioner has the general administration of this Act.
Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.
(1) The Commissioner shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the working of this Act, including any breaches or evasions of this Act of which the Commissioner has notice. (2) The Minister shall cause a copy of a report furnished under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report. (3) For the purposes of section 34C of the Acts Interpretation Act 1901, a report that is required by subsection (1) to be furnished as soon as practicable after 30 June in a year shall be taken to be a periodic report relating to the working of this Act during the year ending on that 30 June.
An Act relating to the assessment and collection of the tax imposed by the Fringe Benefits Tax Act 1986, and for related purposes
This Act may be cited as the Fringe Benefits Tax Assessment Act 1986.
This Act shall come into operation on the day on which it receives the Royal Assent.
Chapter 2 of the Criminal Code applies to all offences against this Act.
Note: Chapter 2 of the Criminal Code sets out the general principles of criminal responsibility.
(1) This Act extends to every external Territory referred to in the definition of Australia. (2) Except so far as the contrary intention appears, this Act extends to acts, omissions, matters and things outside Australia, whether or not in a foreign country. (3) Except where otherwise expressly provided, this Act extends to matters and things whether occurring before or after the commencement of this Act. (4) This Act binds the Crown in each of its capacities.
The Commissioner has the general administration of this Act.
Note: An effect of this provision is that people who acquire information under this Act are subject to the confidentiality obligations and exceptions in Division 355 in Schedule 1 to the Taxation Administration Act 1953.
(1) The Commissioner shall, as soon as practicable after 30 June in each year, prepare and furnish to the Minister a report on the working of this Act, including any breaches or evasions of this Act of which the Commissioner has notice. (2) The Minister shall cause a copy of a report furnished under subsection (1) to be laid before each House of the Parliament within 15 sitting days of that House after the day on which the Minister receives the report. (3) For the purposes of section 34C of the Acts Interpretation Act 1901, a report that is required by subsection (1) to be furnished as soon as practicable after 30 June in a year shall be taken to be a periodic report relating to the working of this Act during the year ending on that 30 June.
The following is a simplified outline of this Division:
This Division explains how to work out an employer’s fringe benefits taxable amount for a year of tax. This is the amount on which the employer must pay fringe benefits tax (see section 66).
Year of tax 2000‑2001 and later years (1A) Subject to subsection (1D), an employer’s fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax is the sum of the subsection (1B) amount and the subsection (1C) amount.
Note: Other provisions affect the fringe benefits taxable amount. For example, see section 124 (about assessments).
Subsection (1B) amount (1B) The subsection (1B) amount is the amount worked out using the formula: Subsection (1C) amount (1C) The subsection (1C) amount is the amount worked out using the formula: Increase in fringe benefits taxable amount for year of tax 2000‑2001 and later years (1D) If any benefits provided in respect of the employment of an employee of an employer are exempt benefits under section 57A, the employer’s fringe benefits taxable amount for the year of tax beginning on 1 April 2000 or a later year of tax as worked out under subsection (1A) is increased by the employer’s aggregate non‑exempt amount for the year of tax concerned. How to work out aggregate non‑exempt amount (1E) An employer’s aggregate non‑exempt amount for the year of tax is worked out as follows.
Method statement
Step 1. For each employee, add:
(a) the individual grossed‑up type 1 non‑exempt amount (see subsection (1F)) in relation to the employer for the year of tax; and
(b) the individual grossed‑up type 2 non‑exempt amount (see subsection (1G)) in relation to the employer for the year of tax.
The result is the individual grossed‑up non‑exempt amount for the employee.
Step 2. If:
(b) the employer is a government body and the duties of the employment of one or more employees are as described in paragraph 57A(2)(b) (which is about duties of employment being exclusively performed in or in connection with certain hospitals); or
(c) the employer is a public hospital; or
(ca) the employer provides public ambulance services or services that support those services and the employee is predominantly involved in connection with the provision of those services; or
(d) the employer is a hospital described in subsection 57A(4) (which is about hospitals carried on by certain societies and associations that are exempt from income tax);
subtract $17,000 from the individual grossed‑up non‑exempt amount for each employee of the employer referred to in paragraph (c), (ca) or (d), or each employee referred to in paragraph (b), for the year of tax. However, if the individual grossed‑up non‑exempt amount for such an employee is equal to or less than $17,000, the amount calculated under this step for the employee is nil.
Step 3. If step 2 does not apply in respect of one or more employees of the employer, reduce the individual grossed‑up non‑exempt amount for each such employee by $30,000, but not below nil.
Step 4. If the amount calculated under step 2 or 3 in respect of an employee is positive, reduce that amount (but not below nil) by the lesser of:
(a) $5,000; and
(b) so much of the employee’s individual grossed‑up non‑exempt amount as relates to benefits covered by subsection (1M) (about salary packaged meal entertainment and entertainment facility leasing benefits).
Step 5. Add together the amounts calculated under step 4 in relation to the employees of the employer. The total amount is the employer’s aggregate non‑exempt amount for the year of tax.
Individual grossed‑up type 1 non‑exempt amount (1F) For the purposes of step 1 in the method statement in subsection (1E), the individual grossed‑up type 1 non‑exempt amount of an employee in relation to the employer for the year of tax is: Individual grossed‑up type 2 non‑exempt amount (1G) For the purposes of step 1 in the method statement in subsection (1E), the individual grossed‑up type 2 non‑exempt amount of an employee in relation to the employer for the year of tax is: Working out the type 1 individual base non‑exempt amount (1H) An employee’s type 1 individual base non‑exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 3 of the method statement in subsection (1K) and step 3 of the method statement in subsection (1L). Working out the type 2 individual base non‑exempt amount (1J) An employee’s type 2 individual base non‑exempt amount in relation to the employer for the year of tax is worked out by adding the amounts worked out under step 4 of the method statement in subsection (1K) and step 4 of the method statement in subsection (1L). Working out the subsection (1K) amounts (1K) An employee’s subsection (1K) amounts for the year of tax are worked out as follows.
Method statement
Step 1. Work out under subsection 135Q(3) for each of the employer’s employees the amount that would be the employee’s individual fringe benefit amount for the year of tax in respect of the employee’s employment by the employer if subsection 135Q(1) were amended:
(a) by omitting “or 58”; and
(b) by omitting “one of those sections” from paragraph (b) and “those sections” from paragraph (c) and substituting in each case “that section”.
Step 2. Identify the benefits taken into account in step 1 that are GST‑creditable benefits (see section 149A).
Step 3. So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (1K) amount for the individual.
Step 4. The remainder of the amount is the step 4 of subsection (1K) amount for the individual.
Working out the subsection (1L) amounts (1L) An employee’s subsection (1L) amounts for the year of tax are worked out as follows.
Method statement
Step 1. Work out for each employee his or her share (if any) of the amounts that, if section 57A did not apply, would be the taxable values of the excluded fringe benefits for the year of tax in respect of the employee’s employment by the employer if those benefits were not excluded fringe benefits, but disregarding benefits:
(a) that constitute the provision of meal entertainment as defined in section 37AD (whether or not the employer made an election under section 37AA); or
(b) that are car parking fringe benefits; or
(c) whose taxable values are wholly or partly attributable to entertainment facility leasing expenses.
Step 2. Identify the benefits taken into account in step 1 that are GST‑creditable benefits (see section 149A).
Step 3. So much of the amount worked out under step 1 that relates to the benefits identified under step 2 is the step 3 of subsection (1L) amount for the individual.
Step 4. The remainder of the amount is the step 4 of subsection (1L) amount for the individual.
Salary packaged meal entertainment and entertainment facility leasing benefits (1M) This subsection covers a benefit that is provided under a salary packaging arrangement if: (a) the benefit is constituted by the provision of meal entertainment (as defined in section 37AD, whether or not the employer has elected that Division 9A of Part III apply to the employer); or (b) the benefit is wholly or partly attributable to entertainment facility leasing expenses. Using aggregate fringe benefits amount for most recent base year (2) This section is subject to section 135G.
Note: Section 135G allows the fringe benefits taxable amount to be worked out using the employer’s aggregate fringe benefits amount from an earlier year of tax in special cases.
Definitions (3) In this section:
FBT rate means the rate of fringe benefits tax for the year of tax.
GST rate means the rate of goods and services tax payable under the A New Tax System (Goods and Services Tax) Act 1999 for the year of tax.
type 1 aggregate fringe benefits amount means the employer’s type 1 aggregate fringe benefits amount for the year of tax worked out under subsection 5C(3).
type 2 aggregate fringe benefits amount means the employer’s type 2 aggregate fringe benefits amount for the year of tax worked out under subsection 5C(4).
(1) Work out an employer’s aggregate fringe benefits amount for a year of tax earlier than the year of tax beginning on 1 April 2000 as follows:
Method statement
Step 1. Work out under Division 3 for each of the employer’s employees the individual fringe benefits amount for the year of tax in respect of the employment of the employee by the employer.
Step 2. Add up all the individual fringe benefits amounts worked out under Step 1.
Step 3. Add up the taxable value of every excluded fringe benefit (other than an amortised fringe benefit) relating to an employee of the employer, the employer and the year of tax.
Note: Subsection 5E(3) explains what is an excluded fringe benefit.
Step 4. Add the total from Step 2 to the total from Step 3.
Note: The result of Step 4 is the employer’s aggregate fringe benefits amount if there are no amortised fringe benefits or reducible fringe benefits in relation to the employer.
Step 5. Add to the total from Step 4 the amortised amount for the year of tax of each amortised fringe benefit (if any) relating to an employee of the employer, the employer and any year of tax.
Step 6. Subtract from the total from Step 5 the reduction amount for the year of tax of each reducible fringe benefit (if any) relating to an employee of the employer, the employer and the year of tax.
(2) An employer’s aggregate fringe benefits amount for the year of tax beginning on 1 April 2000 or a later year of tax is the sum of the employer’s type 1 aggregate fringe benefits amount and the employer’s type 2 aggregate fringe benefits amount for the year of tax. (3) Work out an employer’s type 1 aggregate fringe benefits amount for a year of tax as follows.
Method statement
Step 1. Identify the fringe benefits in respect of each of the employer’s employees that are GST‑creditable benefits (see section 149A), and work out under Division 3 for each of those employees the individual fringe benefits amount for the year of tax in relation to those fringe benefits.
Step 2. Add up all the individual fringe benefits amounts worked out under step 1.
Step 3. Identify the excluded fringe benefits (other than an amortised fringe benefit) for the year of tax in respect of each of the employer’s employees that are GST‑creditable benefits, and add up the taxable values of all those excluded fringe benefits.
Note 1: Subsection 5E(3) explains what is an excluded frin
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