payroll tax – fringe benefits - revenue nsw · page 6 what is fbt a fringe benefit is a benefit...
TRANSCRIPT
Office of State Revenue: ISO 9001 – Quality Certified
Payroll Tax – Fringe BenefitsWebinar
Presented by:
Andrew Fricot and Ankur Dhar
Client Account Managers
March 2015
Page 2
How to interact today
Raise your virtual hand to ask an audio question at
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Type your comments and questions here throughout the webinar and hit ‘send’
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Page 3
Agenda
Actual vsEstimated
Method
Apportioning Fringe Benefits
Common FBT Mistakes
More information
About us
Taxable wages
What is FBT
FBTable items
Page 4
About your presenters
Andrew FricotClient Account Manager
Ankur DharClient Account Manager
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What is liable?
Salaries and Allowances
Apprentice and Trainee Payments
Contractor Fees and
Director Fees
Super, Bonuses and Commissions
Fringe Benefits
Leave and Termination Payments
Shares and Options
Page 6
What is FBT
� A fringe benefit is a benefit provided to an employee in relation to their employment.
� Fringe Benefits Tax or FBT is a tax paid on certain benefits provided to employees or an associate of an employee. It is separate from income tax and is based on the taxable value of the various fringe benefits provided by your employer.
� The FBT year runs from 1 April to 31 March as opposed to the financial year which runs from 1 July to 30 June.
� If it is unclear whether you have received a fringe benefit, put yourself in the shoes of your employer and ask yourself, would you as an employer have provided the benefit if the recipient had not been your employee?
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FBTable Items
� Here are some of the more common items that are reported on a FBT return
� Car parking
� Loans
� Car (Novated Lease)
� Meals and entertainment
� Living Away From Home Allowance (LAFHA)
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Type of FBT
PTA – 005
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FBT – ATO
https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)
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Fringe Benefits – General Rule for Payroll Tax
� The definition of wages for payroll tax purposes includes any fringe benefits as defined in the FBTAA.
� Therefore, as a general rule, benefits that are taxable under the FBTAA are also taxable under the Payroll Tax Act and must be declared as wages for payroll tax purposes.
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Tax-exempt body entertainment fringe benefit
� The only exception to this general rule is a tax-exempt body entertainment fringe benefit as defined in the FBTAA. Although tax-exempt body fringe benefits are subject to FBT, they are specifically exempt for payroll tax purposes.
� If a benefit is exempt under the FBTAA (e.g. a portable electronic device such as a laptop) it is also exempt from payroll tax.
� In addition, if a fringe benefit has a ‘nil’ taxable value for FBT purposes (e.g. the taxable value is reduced to ‘nil’ under the “otherwise deductible” rule), it also has a ‘nil’ taxable value for payroll tax purposes.
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Fringe benefits
PTA – 003
or
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Fringe Benefits – ACTUAL method
Declare actual fringe benefits paid each month, grossed up by
type 2 factor (From 1 July 2014 – 1.8868)
Declare Jul–Jun fringe benefits, grossed up by type 2 factor
2014–15 Monthly Returns
2015 Annual Reconciliation
PTA – 003
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Fringe Benefits – ESTIMATED method
Based on your FBT return from the previous FBT year
Declare 1/12th of the grossed up fringe benefits from your 2014
FBT return(April 12 – March 13)
Declare full year’s grossed up fringe benefits from your 2015
FBT return(April 2014 – March 2015)
2014–15 Monthly Returns
2015 Annual Reconciliation
PTA – 003
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Fringe benefits – ESTIMATED method
Monthly Returns FBT Return 31 March 2014
$11 000 + $9 000 = $20 000 $20 000 x 1.8868 = $37 736
$37 736 / 12 = $3 144
PTA – 003
Note: Type 2 rate increases to 1.8868 for 2014–15
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Fringe Benefits – ESTIMATED method
Annual Reconciliation
FBT Return 31 March 2015
$11 000 + $12 000 = $23 000 $23 000 x 1.8868 = $43 396
1 2, 0 0 0
Already declared = $34 584 ($3 144 x 11 months)
Remaining benefits to declare = $8 812
PTA – 003
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Fringe Benefits
Declare the NSW component of Fringe Benefits paid for NSW Payroll Tax
$750,000
$250,000
Australian Wages
NSW Wages
Interstate wages
75%
25%
Total Fringe Benefits
% declared in NSW
% declared interstate
PTA – 003
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Common FBT mistakes
Reportable valueis used
(First $2000 is not reported)
Type 1 gross up factoris used
(Includes GST)
Salary sacrificed amounts are used
(The amounts are not the same on the FBT return)
Fringe benefits are not proportioned between
the States(Incorrect declaration)
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2015 Annual Return
� For the 2015 annual return continue use the Type 2 gross up rate of 1.8868
� Estimate Method – Annual Return 2015
� Use (Type 1 + Type 2) x 1.8868 for June 2015 adjustment
� Estimate Method – July to June 2016
� Use (Type 1 + Type 2) x 1.9608 / 12 each month
� Actual Method – month by month
� Use Type 2 gross up rate 1.9608 from 1 July 2015 until future rate change
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Most common payroll tax mistakes
Net wages instead Gross wages
Allowances – Not substantiating exempt component
Fringe Benefits – Reportable, salary sacrifice, grossing-up, proportioning
Super – All amounts including salary sacrifice
Third-party payments for Directors
Threshold entitlement – proportioned to total Australian wages
Apprentices and Trainees must be legitimate
Contractors – All liable until exempted
Grouping – Multiple threshold claimants
