Fringe benefits tax for not-for-profit organisations
Providing non-cash benefits to employees on the top of salaries is a common practice for not-for-profit organisations. These non-cash benefits are normally subject to Fringe Benefits Tax (FBT). FBT is paid by employers.
These non-cash benefits usually include:
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Private expenses paid by the employer for an employee
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Private use of a car that belongs to the employer (or novated lease)
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Low interest loans or debt wavier
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Accommodation provided to an employee
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Employee’s personal meal expenses
A non-profit organisation’s FBT concession status determines its FBT rates. Registered public benevolent and health promotion charities are normally eligible to FBT exemption with a capping threshold of $30,000. Public and non-profit hospitals and public ambulance services are eligible to FBT exemption with a capping threshold of $17,000. These capping thresholds are the grossed-up amounts, not the actual benefit amounts.
Other charities with FBT rebate concession are currently eligible to a rebate of 47% with a capping threshold of $30,000.
A separate single grossed-up capping of $5,000 is currently applicable to fringe benefits that are salary packaged entertainment expenses. This cap is available to employers able to access an FBT exemption or rebate.
The entertainment types are subject to the capping include:
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Entertainment by the way of food or drink
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Accommodation or travel to facilitate the provision of entertainment
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Entertainment facility leasing expenses
If you have an FBT liability (also known as a fringe benefits taxable amount) for the FBT year ending 31 March 2019, you must lodge an FBT return by 21 May 2019. The due dates for lodgment of 2019 FBT returns for all tax agents are 25 June if the return is lodged electronically.
We assist not-for-profit organisations to prepare and lodge Fringe Benefits Tax return. Please feel free to contact us if you have any questions.
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Advantage NFP
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