Detailed fringe benefits, as defined and valued for the purposes of the Fringe Benefits Tax Assessment Act 1986 (Cth) (FBTA Act), are generally subject to payroll tax. See the ATO website for examples of fringe benefits.
Exempt benefits or benefits with a nil taxable value under the FBTA Act are generally exempt from payroll tax.
Calculating the fringe benefits valueShow more
The taxable value of WA fringe benefits for payroll tax is the total of the Type 1 and Type 2 WA fringe benefits pre-grossed-up amount, less remote area exemption, multiplied by the Type 2 gross-up rate.
The fringe benefit tax (FBT) year is from 1 April to 31 March, but for payroll tax purposes you can apply the Type 2 gross-up rate from 1 July to 30 June.
Example FBT annual calculation
An employer’s FBT return submitted to the Australian Taxation Office for the year ending 31 March 2021 includes the following:
|Type 1 WA fringe benefits pre-grossed-up value||$160,000|
|Type 2 WA fringe benefits pre-grossed-up value||$90,000|
|Remote area exemption||$2,000|
|Type 2 grossed-up rate||1.8868|
Calculation = (($160,000 + $90,000) - $2,000) × 1.8868)
The taxable value of WA fringe benefits that should be declared for payroll tax for year ended 30 June 2021 is $467,926.
Declaring fringe benefitsShow more
You must declare the taxable value of fringe benefits in your payroll tax returns. You can declare actual fringe benefits or you can use the estimated method in which the amounts declared are based on the FBT returns submitted to the Australian Tax Office (ATO). Notify us if assessment or amended assessment is issued by the ATO.
- All returns for a financial year must be made on the same basis - either estimated or actual.
- To change from actual to estimated value, you must lodge form FPRT4 ‘Election Form: Fringe Benefits Estimated Method’.
- To change from estimated to actual value, you must let us know in writing and complete an adjustment calculation. This is the difference between amount you paid under the estimated method and the amount that should have been paid if you were using the actual method. Use this calculation for the adjustment:
WA fringe benefits for the FBT year that ends in the financial year in which the final payroll tax return falls
+ actual WA fringe benefits for April, May and June of that financial year
1/4 WA fringe benefits for the FBT year that ends in the first financial year the estimated method was used
+ total WA fringe benefits included in returns for the financial year
To use the estimated method, lodge form FPRT4 ‘Election Form: Fringe Benefits Estimated Method’ no later than the due date of the first payroll tax return of the first financial year in which you will use the estimated method.
- If you're registered for monthly returns, declare one twelfth of the adjusted value of WA fringe benefits each month from July to May.
- If you're registered for annual returns, declare the adjusted value of WA fringe benefits for the FBT year that ends immediately before the June return.
- A fringe benefits reconciliation is required in the June payroll tax return of each assessment year. The June payroll tax return should include the difference between the total amount of fringe benefits declared in the July to May returns, and the actual value of fringe benefits declared in the FBT return for the year ending 31 March immediately before the annual reconciliation.
- Use form FPRT3 ‘Worksheet: Fringe Benefits Reconciliation’ to calculate the amount of the adjustment to be included in the June return.
- You can only elect to use the estimated method if you have been paying FBT on fringe benefits to the ATO for at least fifteen months prior to the commencement of the assessment year.
Remote area fringe benefitsShow more
Remote area fringe benefits are exempt when they are ‘fly in fly out’ transport and accommodation. There is a concessional treatment for housing, residential fuel and holiday travel provided to employees in remote areas. For payroll tax purposes, ‘fly in fly out’ arrangements are not included as wages.
Full exemptions are provided for residential fuel (such as electricity and gas), housing assistance, domestic water, holiday transport and education costs.
- Holiday transport - limited to the cost of the return economy airfare to the capital city of their work place, when the employee does not travel back to their hometown or that capital city.
- Education costs - limited to the educational costs of an employee's dependant that is required to live away from home in order to attend on a full-time basis, a primary, secondary or tertiary institution that is not within a reasonable distance of the remote place at which the employee performs services.
Estimated method: final return
Employer ceases between April and June
Employer ceased: 30 June 2019
- First year on estimated method: 2016/17
- Adjusted WA fringe benefits for FBT year 31 March 2017: $24,000
- Adjusted WA fringe benefits for FBT year 31 March 2018: $48,000
- Adjusted WA fringe benefits for FBT year 31 March 2019: $72,000
- Actual WA fringe benefits April 2019 to June 2019: $20,000
|WA fringe benefits for FBT year 31 March 2019||72,000|
|WA fringe benefits for April, May and June 2019||20,000||92,000|
|1/4 WA fringe benefits for FBT year 31 March 2017 (1/4 of $24,000)||6,000|
|WA fringe benefits to be included in payroll tax returns|
|July 2018 to May 2019 (11 x 1/12 x $48,000)||44,000||- 50,000|
|Amount to be declared in final return (June 2019)||$42,000|
Employer ceases between July and March
Employer ceased: 31 August 2019
- First year on estimated method: 2017/18
- Adjusted WA fringe benefits for FBT year 31 March 2018: $24,000
- Adjusted WA fringe benefits for FBT year 31 March 2019: $72,000
- Actual WA fringe benefits April 2019 to August 2019: $40,000
|WA fringe benefits for FBT year that ends in the financial year in which the final payroll tax return falls (1 April 2019 to 31 August 2019)||40,000|
|WA fringe benefits for April, May and June of the FBT year 1 April 2019 to 31 March 2020||NIL||40,000|
|1/4 WA fringe benefits for FBT year 31 March 2018 (1/4 of $24,000)||6,000|
|WA fringe benefits included in payroll tax return July 2019 (1/12 x $48,000)||6,000||- 12,000|
|Amount to be declared in final return (August 2019)||$28,000|
Record keepingShow more
You must make and retain records to support the calculation of the value of fringe benefits included or to be included in payroll tax returns.
You must retain a record of the adjusted value of WA fringe benefits for the FBT year that ends in the financial year in which the estimated method was first used, until five years after ceasing to declare payroll tax on fringe benefits under the estimated method.
You must keep all other records for five years.