Many business owners have used fringe benefits practices and this method is an excellent way for businesses to stay competitive, offer added value to employees and attract high-value employees. It is essential to completely understand what exactly payroll tax is before understanding fringe benefits tax. If you don’t know about FBT, you can take help from accountants for small company. As a business, you have to pay fringe benefits tax (FBT) for the advantages you offer – but there are various benefits to offering additional benefits to your employees as a part of your employment package. In today’s blog, we’ll discuss fringe benefits tax:
What are Payroll Tax Fringe Benefits?
Take a look at the following section to know payroll tax fringe benefits:
- Fringe Benefits Attract the Best Employees
If you have plans to hire employees for your company, you are required to find the appropriate benefits to attract them. As a result, you may succeed to influence top talent while successfully keeping them away from your competitors. To get the right attention from top talent, you need to introduce opportunities for fringe tax benefits. Fringe benefits are important for high earners as they minimise the income tax you pay, essentially providing monetary value without the additional tax. For more information, you can opt for small business accounting solutions.
- Help Businesses Retain Existing Employees
Retaining existing employees and making sure the lowest turnover possible is important for any business, especially in industries where trained or skilled workers may be difficult to come by. Employee retention strategies focus on offering more value and a better experience to existing employees and keeping them working for you for a longer period of time.
- Make Businesses More Competitive
Mostly every business has intense competition, whether, from adjacent companies or companies those offer the same services that work in the same niche. If you want your business appears the best of the bunch, then opting for fringe benefits would be the best option.
Fringe Benefits Tax Concessions or Exemptions
If you are not aware of FBT concessions or exemptions, then you can take help from a small business accountant in Melbourne. Some benefits are for benefits provided by not-for-profit companies.
- Portable electronic device exemption related to work
If an employer provides portable electronic devices to their employees related to work after 31 March 2016, then this FBT exemption can be applied.
- Other items exemption related to work
Other work-related items can be exempted from FBT, although there are some limitations:
- Protective clothing
- Computer software
- Tools of the trade
- Taxi Travel Expenses Exemption
Employee taxi fare payments made by the employer may not be subject to the FBT if the trip is one of the following:
- A single journey beginning or finishing at an employee’s place of employment.
- Resulting from the employee’s illness or injury.
- Minor Benefits Exemption
It has benefits with a cost of under $300. The benefits can be exempted from the FBT if it would be unreasonable to classify it as a fringe benefit, that is if:
1. The benefit is delivered irregularly.
2. The minor benefit has a low taxable value.
3. It is challenging to determine the minor benefit’s taxable value.
- Small Business Car Parking Exemption
Employers who operate small businesses are exempt from providing parking benefits if:
- The employer was a small business for the previous financial year prior to the FBT year.
- The employer’s total gross income for the previous financial year, which was the FBT year, was less than $10 million.
There are various small businesses in Melbourne, and if they are also offering fringe benefits, then should know what FBT concessions are available. As a business owner, if you have been providing fringe benefits for the last 12 months, then you must know about fringe benefits tax concessions. If you don’t know, then you must ask your accountant.
The blog shares information on what exactly benefits you can get on payroll tax fringe benefits. Despite this, you also came to know about available FBT concessions or exemptions that you can claim. For more detail, you can also contact the Accounting firm.