18 April 2022 15:35

# How do you calculate statutory using FBT?

The statutory FBT method is based on how much the vehicle costs rather than how much it is being used privately. It uses a flat rate of 20% of the car’s base value, taking into account the number of days per year the vehicle is available for private use.

## What is the statutory formula method?

The statutory formula method is based on the number of days during the FBT year when the car is available for the employee’s private use or is actually used by the employee for private purposes – for more information about private use, see section 7.1 ).

## How is FBT payable calculated?

The calculation is: Taxable Value x Gross-Up Rate x FBT Rate. Taxable Value – the amount calculated using either Statutory Formula or Operating Cost. Gross-Up Rate – provided by the ATO, the rates are 2.0802 and 1.8868 (2.0802 is for benefits with GST, and 1.8868 for benefits without).

## How is Reportable FBT calculated?

Calculating reportable fringe benefits amount

The lower gross-up rate for the FBT year ending is 1.8868. For example, if the taxable value of your fringe benefits is \$2,000.00, your reportable fringe benefit amount is calculated as \$2,000.00 × 1.8868 = \$3,773.

## Do you include GST when calculating FBT?

When calculating the taxable value of a benefit, the value of the fringe benefit is the GST-inclusive value where applicable.

## What is FBT statutory rate?

The Statutory FBT method

A flat rate of 20% of the car’s base value is used, which takes into account the number of days a year the vehicle is available for private use. Put simply, the base value is the car’s purchase price, less stamp duty and any registration costs incurred as part of the purchase.

## What are the two methods by which FBT is calculated for a car and which method will be used?

There are two calculation methods available to value a car fringe benefit – the Statutory Formula or the Operating Cost method. An employer can to choose which method determines the lowest taxable value.

## What is the difference between Type 1 and Type 2 FBT?

The difference between a Type 1 fringe benefit and Type 2 fringe benefit is whether the amount is entitled to a GST credit. Type 1 fringe benefits are a GST taxable supply with an entitlement to a GST credit whereas with Type 2 fringe benefits, the provider of the benefit is unable to claim a GST credit.

## Are FBT employee contributions taxable?

Using employee contributions

The contribution is usually a cash payment made to you or the person who provided the benefit. Under the valuation rules for most categories of fringe benefits, the taxable value of a fringe benefit can be reduced by the amount of the employee contribution.

## Is GST payable on employee contribution?

Employee contributions (other than a contribution of services as an employee) are consideration for a taxable supply and you must pay GST on the supply. The GST-inclusive employee contribution reduces the taxable value of the fringe benefit.

## Does FBT apply to former employees?

What a fringe benefit is. A fringe benefit is a benefit provided to an employee (or their associate) because that person is an employee. Benefits can also be provided by a third party under an arrangement with the employer. An employee can be a current, future or former employee.

## What is FBT employee contribution?

EMPLOYEE CONTRIBUTIONS. Employee contributions are after-tax costs paid by an employee in maintaining a car during the FBT year and are considered when calculating the taxable value of a car for FBT purposes and can reduce the taxable value to nil.

## Is FBT a deductible expense?

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay. Employers can also generally claim GST credits for items provided as fringe benefits.

## How does FBT affect my tax return?

FBT is a separate tax, but income tax and social security services eligibility are inter-related. FBT affects the cost of an employee’s salary package, and has an impact on net pay. In addition, fringe benefits above a certain level are counted as income when applying for government benefits.

## Is FBT a liability?

Your employer is liable for any applicable FBT on fringe benefits they provide to you and/or your family. FBT is separate from income tax. It’s calculated on the taxable value of a fringe benefit. The taxable value is generally the cost to your employer of providing the benefit to you.

## Is laptop exempt from FBT?

Subject to the limitations below, the following work-related items are exempt from fringe benefits tax (FBT): portable electronic devices such as mobile phones, laptops, tablets, portable printers and GPS navigation receivers.

## Is a cell phone a fringe benefit?

If you provide your employees with a cell phone for business use, both their business and personal use of the cell phone is a non-taxable fringe benefit.

## Is a phone a fringe benefit?

As per chapter 9.9 of the: Fringe Benefits Tax – A guide For Employers: If the mobile phone is primarily for use in the employee’s employment, the benefit is an exempt benefit.

## Is clothing a fringe benefit?

If clothing provided does not qualify as a deductible expense (i.e. as a uniform), then the clothing, or reimbursement for the clothing, must be treated as a taxable fringe benefit and is subject to income, social security and Medicare taxes.

## Is a \$25 gift card taxable income?

The Internal Revenue Service (IRS) tells employers that all cash gifts, including gift cards, are considered taxable wages unless specifically excluded by a section of the Internal Revenue Code (IRC).

## Is laundry allowance taxed?

If you receive an allowance from your employer for laundry expenses: you can only claim a deduction for the amount you actually spent, not simply the amount of your allowance. the allowance is assessable income, which you must include on your tax return.