The ATO isn’t just watching your bank account—it’s got an eye on the perks you give your team too. And if you’re handing out footy tickets, gym memberships, or company cars like they’re freebies, you might be in for a nasty tax surprise. Welcome to the world of Fringe Benefits Tax (FBT)—the sneaky tax that trips up more trade business owners than you’d expect.
What is FBT, Anyway?
FBT is a tax you, the employer, have to pay on any extra perks (a.k.a. fringe benefits) you give your employees outside their salary. It’s the ATO’s way of making sure non-cash rewards—like company cars, event tickets, and gym memberships—get taxed just like wages.
Common FBT Myths That Could Cost You Big Time
1. “If it’s a ute, it’s tax-free.”
Not necessarily! If your employee is taking the work ute home and using it for more than just the odd trip to Bunnings, the ATO considers it private use—which means you’re on the hook for FBT.
2. “A company car? That’s just a business expense.”
Sure, but if your employee can use it outside work hours, it’s FBT territory. And if they’re rolling up to date night in your company’s new Hilux, you better believe the taxman wants a piece of that action.
3. “Treating yourself or clients to Broncos tickets is just good business.”
Sure, it might impress the clients or make for a great night out, but don’t think for a second that the ATO isn’t paying attention. Entertainment expenses like footy tickets are almost always subject to FBT. Whether you're taking a client, rewarding a top performer, or justifying it as “networking,” the taxman wants his share.
4. “Gym memberships are a health initiative, not a tax issue!”
A fit workforce is a productive workforce, but if you’re footing the bill for your employees’ gym memberships, that’s FBT-applicable.
5. “The Christmas Party Conundrum”
Throwing a festive end-of-year bash? If the cost per head exceeds $300, you could be hit with FBT, even if it’s just snacks and drinks at the office! But, if you keep it modest (under $300 per person) and hold it at work on a business day, you might dodge the tax entirely.
How to Dodge an FBT Disaster
FBT is a complex issue, and getting it wrong can cost your business. The best way to avoid unnecessary tax bills and compliance headaches is to get expert help. Trinity Advisory can assess your situation, ensure you’re meeting ATO requirements, and help structure employee benefits in a tax-effective way.
Call [07 4041 6188] or email info@trinityadvisory.com.au today to book in a meeting with one of our advisors to discuss your specific business.
Get in touch today and make sure your business is FBT - proof!