Reportable Fringe Benefits

What are reportable fringe benefits?

Reportable fringe benefits are certain benefits provided by an employer to an employee that must be reported to tax authorities. They have a taxable value exceeding $2,000 in a fringe benefits tax (FBT) year.

Exceptions include car parking benefits, reimbursement of parking expenses, shared car benefits, certain meal entertainment benefits, remote area housing assistance, and more. Exempt not-for-profit organisations may still report the notional taxable value of benefits. Private use of eligible electric cars is exempt from FBT but still reportable.

In summary, reportable fringe benefits are certain benefits exceeding $2,000 that employers must report, with exceptions outlined in the FBT Guide.

Source: Reportable fringe benefits.

How to calculate reportable fringe benefits?

To calculate the reportable fringe benefits amount (RFBA) for an employee, follow these steps:

  1. Determine the total taxable value of the reportable fringe benefits provided to the employee. This value should be calculated based on the specific fringe benefits provided and their taxable value as per the Fringe Benefits Tax (FBT) rules.
  2. Multiply the total taxable value of the fringe benefits by the lower (type 2) gross-up rate. As of the FBT year ending 31 March 2022, the lower gross-up rate is 1.8868. This rate is used to reflect the pre-tax income the employee would have needed to earn to obtain the benefits themselves.
  3. The result of the calculation is the reportable fringe benefits amount (RFBA) for the employee. This represents the grossed-up value of the fringe benefits that would be considered as part of the employee’s income for reporting purposes.

It’s important to note that the RFBA is used for reporting purposes only and does not affect the amount of FBT that needs to be paid on the fringe benefits provided. The FBT calculation may use a different gross-up rate, but the RFBA calculation always uses the lower (type 2) gross-up rate.

Note: Please consult official guidelines or a qualified tax professional for accurate calculations of fringe benefits and taxation, as tax regulations and rates may change over time.

How can Workstem assist you?

Simplify your payroll management with Workstem’s automated payroll system. We handle easy payroll by integrating employment information, attendance, leave, payroll, tax, superannuation and more into one master file.

By automating the payroll process in accordance with Fair Work and EBAs, Workstem simplifies tasks such as overtime pay, allowances, loadings, and leave cashing out. The STP 2 reporting feature also enables businesses to comply with ATO.

Keep track of compliant payroll processing at its finest with Workstem, boosting efficiency and eliminating the need for tedious manual operations. Join us today!