Unclassified fringe benefits are all benefits provided by employers that aren't specified in legislation, they often include employment-related gifts and prizes and free, subsidised or discounted goods.
Find out more about classified benefits
When you need to pay FBT on unclassified benefits
As an employer, there are 5 situations where you will need to pay fringe benefit tax (FBT) on unclassified benefits. These are when:
- you provide unclassified benefits to your employees
- unclassified benefits are provided by your associated persons, to your employees
- unclassified benefits are provided by you to associated persons of the employee
- unclassified benefits are provided by other companies within your group of companies, to your employee
- unclassified benefits are provided by a third party where by there is an agreement between you and the third party to provide benefits to your employees.
Exemption from FBT
The unclassified benefits you provide will be exempt from FBT if they are under the minimum value threshold.
Quarterly filers
The thresholds for quarterly filers are:
- $300 or less for each employee in a quarter, and
- the total unclassified benefits provided to all employees in the last 4 quarters (including the current quarter) are $22,500 or less.
Annual and income year filers
The thresholds for annual and income year filers are:
- $1,200 or less for each employee for the year, and
- the total unclassified benefits provided to all employees in the last income year must not exceed $22,500.
Public transport
From 1 April 2023 certain public transport benefits you provide to your employees may be exempt. They need to be provided mainly for the purpose of the employee travelling between work and home and be one of the exempt transport options.
Transport fares
The exemption covers a fare for the following transport options:
- Bus
- Train
- Ferry
- Cable car.
Transport fares provided mainly for the purpose of the employee travelling between work and home and partly funded by the Total Mobility Scheme are also included.
Employer provided transport
Also covered under the exemption are employer provided:
- Bicycles
- Electric bicycles
- Scooters
- Electric scooters
- Other low-powered vehicles Waka Kotahi declares are mobility devices or not motor vehicles.
This exemption also applies if the employer helps pay for certain vehicle share services for any of these modes of transport.
Transport not covered
The exemption does not cover transport options such as:
- Air transport
- Taxi
- Shuttle.