There are 3 different fringe benefit tax (FBT) rates. You should choose the one that best suits your business.
The single rate is 49.25%. It is applied to all fringe benefits you provide.
If any of your employees earn less than $70,000 per year you will pay more FBT than if you use an alternate rate.
The short form alternate rate is 49.25% for attributed benefits. It is 49.25% for non-attributed benefits provided to major shareholder-employees, and 42.86% for other non-attributed benefits.
This rate can be a good option if you:
The full alternate rate is between 11.73% and 49.25%. The rate will be higher if the employee earns more or if the fringe benefits they received are worth more.
This rate is only applied to attributed benefits. Using it can reduce the FBT you need to pay, but you must do a separate calculation for each employee.
Our FBT calculator will do this calculation for you.
If you file annually you can choose any of the 3 rates. You can change rates each year.
If you file quarterly you can change rates during the year.
If you use the full or short form alternate rate in any of the first 3 quarters, you must use the full or short form alternate rate in the fourth quarter.
To find out more about FBT rates refer to our Fringe benefit tax guide (IR409).
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