Filing FBT with IRD



Rate of Fringe Benefit Tax
You have choices regarding the rate of fringe benefit tax you use, depending on which type of return you file. You should also be aware of the rates required for major shareholder-employees. Learn the different options for FBT rates (full multi-rate, short form multi-rate) for employers and if they apply to you.

  • Know how to calculate FBT payable for shareholder-employees and employees receiving attributed income using the flat rate or the multi-rate also if it applies to you as an employer.

  • You can choose to pay fringe benefit tax at a flat rate of 64% on all benefits you provide to employees, including shareholder-employees. Learn about the use of the flat rate option to calculate FBT.

  • The multi-rate calculation process allows an employee's fringe benefits to be taxed at their marginal tax rate. It ensures that fringe benefits of employees earning less than $60,000 are not over-taxed (as they may be under the flat rate option). Learn the use of the multi-rate calculation process to calculate FBT as an employer.


Non-Attributed Benefits

Non-attributed benefits are pooled or shared fringe benefits that are not attributed to an individual employee. For example, a non-attributed benefit is a motor vehicle of which no one employee has principal use.

In the final quarter, quarterly filers must check their non-attributed benefits to ensure that the annual taxable value of the employee's benefits in a particular category is less than the thresholds under attributed fringe benefits.


Rate of FBT on Non Attributable
Generally, the FBT rate is 49% for non-attributed benefits. The exception is where one or more of the recipients are a major shareholder-employee or an associated person of a major shareholder-employee.

If one of the recipients of the non-attributed benefit is a major shareholder-employee or an associated person of a major shareholder-employer (where the fringe benefit is not received as an employee), the FBT rate of 64% applies.

Example

Four employees had the private use of a car during the quarter (where the employer, Jane Bloggs Limited, is filing a quarterly FBT return).

  • Two of these employees had the car for 27 days each.
  • Two of these employees had the car for 16 days each.

As no one employee had the principal use of the fringe benefit, Jane Bloggs Limited treats it as a shared vehicle. However, if one of the four employees had greater use of the car, the company would attribute the whole benefit to that employee.



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Some content was obtained from the IRD and incl without change to ensure total accuracy and compliance with current law.