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The low-down on fringe benefit tax (FBT)

Fringe benefits are exactly that – the perks of the job that aren’t salary or wages. Things like using a work car out of hours and employer contributions to your Super. As an employer, you have a few options with FBT.

FBT in a nutshell

Fringe benefit tax (FBT) is a tax on benefits employees receive through their employment, including benefits provided by someone other than their employer. Cash benefits are treated as normal salary and wages, with PAYE deducted.

There are four main types of taxable fringe benefits:

  • motor vehicles available for private use
  • free, subsidised or discounted goods and services
  • low-interest loans
  • employer contributions to funds, insurance and superannuation schemes.

FBT filing periods

There are three types of FBT returns. You can choose one filing option or, if you’re a closely held company with ordinary employees and shareholder-employees, you can choose dual filing if you meet the criteria below.

Quarterly (IR420)You must file quarterly when your combined annual gross tax and employer superannuation contribution tax (ESCT) for the previous year is over $500,000.

You can choose to file quarterly if these are under $500,000.

Income year (IR421)
If you only have shareholder-employees and your annual gross tax and ESCT is under $500,000, or you’re a closely held company and have no more than two vehicles for private use to shareholder-employees, this is the option for you.

Annual (IR422)
Choose this option if your annual gross tax and ESCT for the previous year was $500,000 or less, or you weren’t an employer in the previous year.

Work out the option that best suits your business with Inland Revenue’s fringe benefit tax election tool (external link) .

Want to file once a year?

You can choose to file by income year or annually. There are set dates when you can elect to do this, so Inland Revenue knows when you’ll be filing your return and payment.

Income year

  • Existing employers with shareholder-employees – must elect this option by the last day of the first FBT quarter in the income year the election applies to. For example, a company with a 30 June balance date must elect by 30 September 2014 to file an income year return for the year ended 30 June 2015.
  • New employers with shareholder-employees – must elect by the last day of the first quarter they started employing in, within the income year the fringe benefits relate to. For example, a new company that has a 30 June balance date and starts employing on 31 July 2014 must elect by 30 September 2014 to file an income year return for the year ended 30 June 2015.

Annual

  • Existing employers – must elect by 30 June in the year the fringe benefits were used.
  • New employers – must elect by the last day of the first quarter after starting to employ.

To change when you file your returns, except to quarterly, or if you no longer provide fringe benefits, use Inland Revenue’s fringe benefit tax election tool (external link) .

How to file and pay FBT

If you’re liable for FBT you need to register with Inland Revenue. If you’re not registered, call Inland Revenue on 0800 377 772 between 8am and 8pm Monday to Friday and 9am to 1pm Saturday.

FBT returns and payments are due at the same time. Look up the date that applies to your filing option(s) below. Remember to calculate your FBT liability in whole dollars. Inland Revenue’s fringe benefit section (external link)

Filing optionPeriod coveredReturn and payment due
Quarterly 1 April to 30 June 
1 July to 30 September
1 October to 31 December
1 January to 31 March
20 July
20 October
20 January
31 May
Income year Same period as your tax year Same date as your end-of-year income tax
Annual 1 April to 31 March 31 May

 

Contacts address book

Inland Revenue on 0800 377 772

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