The big change to FBT, which carries over from the previous FBT year, is the continued application of a 49% rate. This is due to revert to 47% on April 1, 2017 (therefore applying for the 2017-18 FBT year onwards), but for the current FBT year, 49% continues to apply. What’s new for FBT in 2017?
Don’t forget also that the FBT gross-up rates will therefore continue to be 2.1463 for Type 1, and 1.9608 for Type 2.
Other factors to note for the current FBT year include that the FBT benchmark interest rate for 2016-17 is unchanged at 5.65% a year. But the FBT record-keeping exemption threshold has increased to $8,286, up from $8,164 (which is merely a CPI adjustment).
One notable change is to the FBT treatment of portable electronic devices. Previously, the FBT exemption applied generally to only one work-related device per employee per FBT year. Unless this device was lost, stolen or destroyed, any subsequent devices (especially if they provided similar functions) were subject to FBT.
For the 2017 year (that is, from April 1, 2016), this limit of one has been lifted. Now, employees can be provided with multiple electronic devices, which will also be FBT exempt, regardless of whether these have substantially similar functions. Note however that the “work-related use” requirement still applies.
A single grossed-up cap of $5,000 applies to any salary packaged meal entertainment (and entertainment facility leasing expenses) for the 2017 FBT year. This sort of benefit can be provided through, for example, the use of a meal card in the case of the former, or the use of a sporting corporate box for the latter. Exceeding the cap will see FBT applied. The 50/50 method and 12-week register has also not been available from April 1, 2016.
The cents per kilometre rates for vehicles other than cars has increased. The rate of 52c applies for an engine capacity up to 2,500cc. Above that capacity the rate is 63c, and for motorbikes it is 16c.
LAFHA food and drink
And the living away from home allowance (LAFHA) reasonable food and drink amounts have increased. For the FBT year ending March 31, 2017, the weekly amounts are:
|One adult and one child||$303|
|Two adults and one child||$424|
|Two adults and two children||$485|
|Two adults and three children||$546|
|Three adults and one child||$545|
|Three adults and two children||$606|
These amounts are for the total of food or drink expenses and include any amounts that may have been allowed for home consumption.
A car parking fringe benefit arises on a day when car parking is provided in respect of employment (generally for more than 4 hours) where the commercial car park charges a representative fee of more than the daily fee threshold (as determined by the ATO) at the beginning of the FBT year.
Car parking daily fee thresholds are adjusted annually, and for the FBT year ending in March this year have been determined at $8.48. This is arrived at by applying CPI to the previous year’s threshold.
Non-remote housing values
The indexation factors for valuing non-remote housing has also increased. For the 2016-17 FBT year, they are:
|New South Wales||1.025|
|Australian Capital Territory||0.978|
Take a note for next year
Note also that from July 1, 2017, the way fringe benefits will be treated for the calculation of several tax offsets will change. The meaning of adjusted fringe benefits total has been modified so that the gross rather than the adjusted net value of reportable fringe benefits is used. Adjusted fringe benefits total is used to calculate a taxpayer’s entitlement for the low income superannuation tax offset, the seniors and pensioners tax offset, the net medical expenses tax offset and the dependent tax offsets.
Tax & Super Australia is presenting a seminar titled “FBT & Salary Packaging” in both Sydney and Melbourne
This seminar will provide comprehensive coverage of specific ATO focus areas and the FBT requirements and concessions pertaining to effective salary packaging arrangements.