Sunshine Coast Bookkeeper
Are you having trouble attracting quality staff? This is something that can cause countless headaches for several businesses. One of the solutions is, obviously, offer more money, but that isn’t always something that you can do. Another option might be free back rubs, but that could come off as creepy and be a short trip to HR.
All kidding aside, one of the best options that you might have heard about is Fringe Benefit Tax (FBT). While it might be something that you are quick to adopt, you need to pause and understand your obligations first before adding it to your employment offers.
So, what is it? Simply put, it’s an extra tax that you cover for your employee that is for the benefit of the employee in lieu of paying them more money. The tax is calculated on the value of what is being used for FBT.
What can be used for FBT? You have a lot of great questions. Sometimes you need to dangle a quality carrot to get those special recruits. This carrot can take the form of executive car parks, low interest loans, paying of the employee’s private expenses, or a nice car to go in that car park.
When it comes to tax time, you as the employer will pay tax on whatever you are offering them through FBT. Fringe benefits will also need to be reported in the employee’s payment summary, all records for the FBT will need to be separately as it will need to be lodged separately with the ATO.
One of the big things to remember though, is that in order to offer an FBT to an employee you need to first register for the FBT with the ATO. That can be done here. The FBT can be signed up for by an existing business with an ABN and those with an existing AUSkey login. If you are a brand new business, you can also apply as long as you’re a sole trader, partnership, company, trust, join venture, or superannuation fund.
If you have any questions about the FBT, you can do what many businesses of the Sunshine Coast have done and contact Balanced Bookkeeping and Business Solutions. We know the ins and outs of all the benefits that you can be using to make your business grow.