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Fringe benefit tax (FBT) is a tax payable when the following benefits are supplied to the employees or shareholder-employees:

  • motor vehicles available for private use
  • low interest/interest free loans
  • free, subsidised or discounted goods and services
  • employer contributions to sick, accident or death benefit funds, superannuation schemes and specified insurance policies (excluding employer contributions to superannuation schemes liable for ESCT (formerly SSCWT)
  • unclassified fringe benefits.

This is different to when you pay your employees. Where you pay cash to your employees, you treat the payment as part of the employee's salary or wage and make normal employee deductions, such as PAYE.

If these benefits are enjoyed or received by employees as a result of their employment, they are liable for FBT. This could be in a past, present or even future employment. Employers pay tax on benefits provided to employees or shareholder-employees, even if the benefits are provided through another person/entities. Employers also pay FBT if the benefits are provided to or enjoyed by associates of the employees or shareholder employees.

There are exemptions to FBT.

Fringe benefit tax for charities

Employer provided motor vehicles for private use

Entertainment expenses

Some entertainment expenses may be subject to fringe benefit tax (FBT) if they are enjoyed or received by employees.

Entertainment expenses


Last updated: 23 Dec 2020
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