Fringe Benefits Tax (FBT)

The Fringe Benefits Tax (FBT) Act 1986 provides that where the University (or a third party under an arrangement with the University) pays for or reimburses extended travel for an employee, FBT will be payable where the primary purpose of the trip was not to conduct business. 

Any private travel must be noted in the online travel approval request and potential FBT implications of any private travel will be calculated and provided to the employee through the completion of the travel approval request. Any FBT liability will be calculated based on the private days as a percentage of the total trip duration. The employee is liable for the FBT costs associated with any private travel.

FBT is payable on the airfare, which will have both a private and a business component and will be applied to other travel-related expenditure unless the employee completes the Travel Diary confirming that the primary purpose of the trip was to conduct business activities. Private travel days must be updated / confirmed in the travel diary once the trip is completed. 

Where the University will have an FBT liability as a result of an employee’s trip, the employee will be required to contribute towards the cost of the travel to reduce the University’s FBT liability to nil. The employee will be informed of the required personal contribution and will be sent an invoice that must be paid in full within 30 days after returning from travel. 

Students are not considered employees and therefore exempt from FBT. However, if a student is being paid by the University (i.e. is on the University payroll as a casual, part-time or fixed-term employee) and is travelling on university business, then the individual is considered an employee and will be liable for the FBT costs associated with the private travel.

If you have any questions regarding FBT or would like further information, please reach out to the University Tax Unit.