I don't understand the impact to employee side if he/she received fringe benefit from his/ her employer. I do understand how GST credit and how FBT impact to employer income tax.
Kindly explain the employee income tax side of effect from FBT. Thank you
Hi @Erandi,
When the employee is receiving fringe benefit amounts from their employer. This is known as reportable fringe benefits amount (RFBA).
The RFBA is grossed up to reflect the pre-tax income the employee would have had to earn, at the highest marginal tax rate (plus medicare levy), to buy the benefits for themself.
The employee isn't taxed on the RFBA. It is included in income tests for some government benefits and obligations.
Check out our link about reportable fringe benefits for employees for further information.
Hopefully this explains it for you.
Hi @Erandi,
When the employee is receiving fringe benefit amounts from their employer. This is known as reportable fringe benefits amount (RFBA).
The RFBA is grossed up to reflect the pre-tax income the employee would have had to earn, at the highest marginal tax rate (plus medicare levy), to buy the benefits for themself.
The employee isn't taxed on the RFBA. It is included in income tests for some government benefits and obligations.
Check out our link about reportable fringe benefits for employees for further information.
Hopefully this explains it for you.
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