Are You Providing Employee Benefits Due to COVID-19? Look Out for FBT
Are you providing rapid antigen tests and other COVID-19 related benefits to employees?
Business owners providing benefits in addition to salary or wages because of COVID-19 need to check if fringe benefits tax (FBT) could apply.
Although you may be providing various benefits to create a safe workplace and support employees, you may be inadvertently liable for fringe benefits tax.
Track COVID-related benefits paid for by the business
- Work from home equipment
- Work vehicles that are garaged at employees’ homes
- Vaccination incentives
- Travel or accommodation costs
- Protective gear
- Emergency health care
If you pay for COVID-related services for employees, you’ll need to track them in your accounting system to make it easy to determine if you have an FBT liability and if you should report any amounts on employees’ end of year income statements.
The minor benefits FBT exemption may apply for many or all of the benefits you have provided to employees. Still, we’ll need to review your records to ensure that you’re not going to get a surprise bill from the ATO down the track! Visit the ATO website for further details on what could be considered an FBT.
Unsure if FBT applies to your business?
FBT is a complex area of tax law, and there are specific tests that must be satisfied to be exempt from FBT.
Book an appointment with us to go through the benefits you have provided to employees. We can look at the minor benefits and otherwise deductible rules to ensure you’re not paying more tax than you need to. If you’re not already registered for fringe benefits tax, we will look at whether FBT applies and register your business if needed.
We’ll also notify you of any amounts that need to be reported on employees’ income statements at the end of the payroll year.
The fringe benefits tax year finishes on 31 March, so now is an excellent time to get ahead and assess whether your business could be up for an FBT bill.