What is Fringe Benefits Tax?
Fringe Benefits Tax (FBT) is separate from income tax. It is a tax paid on certain benefits provided to employees even if that benefit is provided by a third party. It’s based on the idea that providing the benefit to the employee is a form of remuneration just like income and so it attracts tax just as income would. Examples of things considered fringe benefits include allowing your employee to use a work car for private purpose, giving your employee a discounted loan, paying an employee’s gym membership, or giving an employee free tickets to a sporting event.
Fringe Benefits Tax Exemptions
Some benefits are exempt from Fringe Benefits Tax. Even though paying for an employees gym membership to an external facility is considered “entertainment” and attracts the Fringe Benefits Tax, if a company has an on-site fitness facility, this is exempt from the FBT. Avoiding the FBT can save thousands of dollars each year. This unfortunate discrepancy has meant in the past only large corporations have been able to afford to provide this type of benefit to their employees. The fitness industry governing body Fitness Australia has been attempting to urge the government to make changes to this system to avoid the ATO penalising small businesses wanting to provide fitness benefits to employees, however there has been little success so far.
The Fitness Enhancement structure provides a solution to make onsite fitness facilities so affordable that they are within reach of almost all small-medium sized companies around Australia. Costs can be as low as $9 per employee per week, with no upfront costs and small weekly payments, meaning you can work WITH the current system to claim the FBT exemption and still provide your employees with fantastic health and fitness benefits. We help you select the equipment, provide weekly maintenance and management, as well and conduct weekly Group Personal Training – all on site.
Almost Half the Price
With the FBT exemption, having and onsite fitness facility will costing you about half of what you would pay if you were to provide external gym memberships. As an example, if you have a small business with 50 staff and you spend $25,000+GST on annual gym memberships for staff (approx $9 per person per week), your total cost after FBT and income tax is around $37,500. If you spend the same $25,000 + GST amount with Fitness Enhancement’s onsite gym package, your total cost after income tax is around $18,000 resulting in total savings of approx. $19,500. Ask us for an Accountant verified break down of the savings.
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Find out more about how fringe benefits tax can help you and how our corporate fitness sessions work.