Fringe Benefits Tax
Fringe Benefits Tax (FBT) is paid on particular benefits employers provide to their employees or their employees’ associates instead of salary or wages. Benefits can be provided by an employer, an associate of an employer, or a third party by arrangement with an employer. FBT is separate from income tax and based on the taxable value of the various fringe benefits provided. The FBT year runs from 1 April – 31 March.
Superannuation
In addition to employees’ salaries and wages, employers are required to pay super contributions on behalf of all their eligible employees. This compulsory contribution is the superannuation guarantee. It requires you to pay super for your eligible employees, contribute to the correct super funds, and pay contributions by the cut-off date each quarter. The minimum super amount you are required to pay is 9.50% (as of July 1, 2014) of each eligible employee’s earnings base (usually their ordinary time earnings).
You are generally required to pay superannuation contributions for your employees if they are:
- Over the age of 18 (no upper age limit from 1 July 2013)
- Paid $450 or more (before tax) in a calendar month
MORE: Use the Superannuation Guarantee Eligibility Tool to determine whether you need to pay superannuation contributions for an employee.
Super Guarantee Contributions Calculator
Penalties
Tax payers who do not meet their tax obligations may face penalty or interest charges. To avoid these charges, ensure you pay the full amount of tax you owe by the due date.
The main charges for failing to meet tax obligations are the:
General interest charge (GIC) – Applies to a variety of situations, whenever outstanding amounts are due to the ATO.
Failure to lodge on time penalty (FTL) – Administrative penalty which may be applied if you fail to lodge a return, statement, notice, or another document with the ATO by the required date.
Additional penalties include failing to:
- Keep or retain required records
- Retain or produce required declarations
- Provide access and reasonable facilities to an authorised tax officer
- Apply for or cancel GST registration when required
- Issue a required tax invoice or adjustment note
- Register as a PAYG withholder when required
- Lodge a required activity statement electronically
- Pay a required amount electronically
If a tax payer is audited and an amended assessment is raised, further penalties of up to 75% of the additional tax levied may be applied.