Tax Planning Strategy 173 | Salary Packaging for FBT-Exempt Employees
Certain public and non-profit hospitals, ambulance services, public benevolent institutions (PBIs), religious institutions, and health promotion charities (HPCs) are eligible for an FBT exemption.
The benefits it provides its employees are exempt from FBT if the total grossed-up value of certain benefits for each employee during the FBT year is equal to, or less than, the capping threshold. If the total grossed-up value of fringe benefits provided to an employee is more than the capping threshold, the employer will need to pay FBT on the excess. The FBT capping thresholds are:
- PBIs – (other than hospitals) – $30,000 per employee
- HPCs – $30,000 per employee
- Public and not-for-profit hospitals – $17,000 per employee
- Public ambulance services – $17,000 per employee
- Religious institutions for benefits provided to religious practitioners – no cap applies.
Car parking benefits are excluded from the FBT capping thresholds. From the 1st April 2016 only the first $5,000 of meal entertainment and entertainment facility leasing expenses are excluded from the FBT capping thresholds.
PBIs and HPCs must be registered with the ACNC as a PBI or HPC to access the FBT exemption. A religious institution and a non-profit company that is a charity must be registered with the Australian Charities and Not-For-Profits Commission (ACNC) to access the FBT exemption. The capping thresholds apply even if the employee was not employed for the full year.
For the Religious Practitioners exemption see ATO ID 2001/332.
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