This provides some basic information for ANU employees in relation to reportable fringe benefits.
What is a fringe benefit?
A benefit provided to an employee or an associate of an employee (e.g. spouse or child) because of an employment relationship.
What is Fringe Benefits Tax (FBT)?
FBT is a tax on non-cash benefits provided to employees. FBT is payable by employers, not employees.
What are reportable fringe benefits?
Employers are required to report the value of certain fringe benefits provided to employees on their Payment Summary Form (Group Certificate). The amount is known as a Reportable Fringe Benefit Amount (RFBA). An RFBA is only required to be reported when the value of benefits provided to an employee during an FBT year (1 April to 31 March) exceeds $2000.
How is the RFBA calculated?
The RFBA is calculated by "grossing up" the value of the benefits provided (ie. multiplying by 1.9608). The grossed-up taxable value of a benefit reflects the gross salary that an employee would have to earn to purchase the benefit from after-tax dollars.
What does it mean when an employee has a reportable fringe benefit amount?
Employees do not pay income tax or Medicare levy on fringe benefits. The RFBA amount is taken into account by the government when working an individual's liability/eligibility for a range of government charges/entitlements.
- Medicare levy surcharge (not the standard Medicare levy);
- Deduction for personal superannuation contributions;
- Government Super Co-contribution;
- Tax offset for eligible spouse superannuation contributions;
- Higher Education Contribution Scheme (HECS) and Higher Education Loan Program (HELP) repayments;
- Child support obligations; and
- Entitlement to certain income-tested government benefits (refer to Centrelink website for more information).
For more information please refer to the ATO website.