Expense payment fringe benefit overview
FBT is generally payable when, in an employment context, an employer pays or reimburses the employee or an associate of the employee for expenses incurred by the employee or associate. The FBT liability arises at the time the employer makes the payment or reimbursement.
Expense payment fringe benefits are very common benefits and include the following examples.
- The payment (or reimbursement) by the employer of:
- The employee's telephone account
- The employee's medical expenses, rent, rates or electricity
- The school fees of the employee's children
- An employee's car parking expenses
- The payment or reimbursement of expenses incurred by an employee in earning his or her income. For example, if an employee uses the employer's credit card to pay for goods or services, an expense payment fringe benefit does not arise. However, the use of the credit card does incur a residual fringe benefit or property fringe benefit.
Keep in mind the following:
- Items are only exempt if they are primarily used in the employee's employment activities.
- There is a limit of one eligible work-related item per FBT year per employee, unless the subsequent item is a replacement item. An item is considered a replacement item when the former item was lost, damaged, or made obsolete through technological developments.
Latest Information
See the ATO website for additional details and the most up to date information: