FBT exemption
Your not-for-profit organisation may be exempt from FBT if it is a:
- registered public benevolent institution (other than hospitals) endorsed by the ATO
- registered health promotion charity endorsed by the ATO
- public or non-profit hospital
- public ambulance service.
If your organisation is eligible for FBT exemption, benefits provided are exempt from FBT if the total grossed-up value of certain benefits (which are benefits that are not otherwise exempt) provided 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 any employee is more than the capping threshold, your organisation will need to report the details and pay FBT on the excess.
Be aware that if your organisation exceeds the capping threshold for any employee you will need to provide details of fringe benefits provided to all employees not just the details for the employee that exceeded the exemption cap.
The table below outlines the capping thresholds that apply and which organisations need to be endorsed by us to access FBT exemption.
| Types of organisations eligible for FBT exemption (see note 1) |
Capping threshold (see note 2) |
Does the organisation need to be endorsed by us to access FBT exemption? (see note 3) |
|---|---|---|
| Public benevolent institutions (PBIs) other than hospitals | $30,000 per employee |
Yes |
| Health promotion charities (HPCs) | $30,000 per employee |
Yes |
| Public and not-for-profit hospitals | $17,000 per employee |
No |
| Public ambulance services | $17,000 per employee |
No |
Notes to table
- A range of benefits are exempt from FBT. They include certain benefits provided by religious institutions and non-profit companies.
- The $30,000 capping threshold applies (the threshold changes to $31,177 for the FBT years ending 31 March 2016 and 2017 only) even if the PBI or HPC did not employ the employee for the full FBT year. For example, if you employed the employee between October and March and the total grossed-up value of benefits provided was $25,000, FBT will not be payable.If an organisation is a PBI and a hospital, the $17,000 capping threshold applies (the threshold changes to $17,667 for the FBT years ending 31 March 2016 and 2017 only). The organisation cannot choose the PBI exemption cap.
- Before we can endorse PBIs and HPCs to access charity tax concessions, they must be registered with the ACNC as a charity.
- If an organisation exceeds the capping threshold for any employee, details of fringe benefits provided to all employees will need to be reported, not just the details for the employee that exceeded the exemption cap.
Source : ATO Online Services
Date: 29th October 2019
If you require assistance – contact Shannon at Coffs Coast Consulting on (02) 5606 3692.
